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Excellent prospects for Crown Mountain project

World Coal,

Jameson Resources has claimed that the prefeasibility study (PFS) for its Crown Mountain metallurgical coal project in Canada will have “outstanding economics” and be technically robust. For example, the PFS suggests the project will see an IRR of up to 61% and a payback period of just 2.7 years.

Norwest Corp. has managed the PFS, following the completion of a preliminary economic assessment completed in April 2013. Among the key results of the PFS include the fact that early mine life production will peak at 2 million clean tpa, and then level off at 1.7 million tpa average over the Crown Mountain project’s 16 year mine life.

The PFS also shows that the low life-of-mine clean coal strip ratio of 9.9:1 BCM:t supports low cost production, with an average of 7.6:1 BCM:t during the first four years of operation.

Since hard metallurgical coal will comprise approximately 84% of life-of-mine sales, average coal sales price of all coal products from the projects is expected to be at US$ 165/t.

ROM reserves total 56 million t, of which 50 million tonnes are Proven and 6 million t Probable. These figures totally exclude the high potential Southern Extension inferred resource area.

In a statement, Jameson Resources said management was “excited about the results of the PFS and plans to continue to move forward with Crown Mountain.”

The company will now look to continue environmental assessment field work, and also perform a detailed evaluation with respect to developing alternative scenarios which build upon the PFS.

Jameson Resources first began longer-term environmental studies at the British Columbia coal mine in April 2012 with the objective of fast-tracking the permitting process. This work is expected to be completed in time to meet the first production date of late 2017.

The company will also explore and review the potential to extend the southern section of the Crown Mountain project. “The Southern Extension may contribute to improved economics and a possible shift in the PFS mine sequencing and size of the operation,” according to the company.

Other evaluations include:

  • Blending opportunities between pits will be assessed as a means to improve overall product sales realisations.
  • Opportunities to use contract mining will be explored with qualified parties.
  • The potential for synergies with neighbouring operations/ projects will be evaluated.

In a statement, the board of directors at Jameson said the company believes “the PFS is only the first step in quantifying the value of Crown Mountain, and looks forward to continuing to refine the potential of this strategic asset.”

Adapted from press release by Sam Dodson

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