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Tsant Uul Coking Coal Project
The Company owns 90% of the Tsant Uul Coal Project which covers over 59,000Ha of area in the world class South Gobi Coking Coal Province of Mongolia. The project is located only forty kilometres to the south of the giant six billion tonne Tavan Tolgoi coking and thermal coal deposit and approximately 6km from the existing coal haulage road to China.
The Tsant Uul Coal Project will be greatly advantaged by the massive infrastructure projects currently being proposed and developed at the nearby Oyu Tolgoi Copper Gold Project, the Tavan Tolgoi Coking Coal Deposit and the expansion projects at the UHG Coking Coal Mine. The Tavan Tolgoi Coking Coal Field is estimated to contain over six billion tonnes of coking and thermal coal in the South Gobi region of Mongolia.
At the end of April the Company had six drilling rigs operating on the Project and had drilled 44,243 metres from 278 holes. The Company has discovered a semi continuous coal seam with over eight kilometers of strike length and the entire system remains open with some of the better drilling results only recently being completed. Coal has been intersected less than ten metres from surface with a combined seam thicknesses of approximately 30 metres.
The Company has identified an initial Coal Resource of approximately 90Mt, with 61Mt in the Measured and Indicated JORC categories (34Mt Measured, 27Mt Indicated) and has an Exploration Target* of 150Mt to 200Mt of coal for this Project. Another potential coal sub basin has recently been identified at Tsant Uul and the Company is currently drilling this target. The strategic location near existing infrastructure and the quality and potential size of Tsant Uul has made it a clear candidate for fast track development. A mining licence application has been lodged and is being processed by the Mineral Authority of Mongolia. Mining is expected to commence in the second half of 2011. Discussions have commenced with a number of mine gate off-take partners.
*This work has not resulted in the definition of any resource which is compliant with the JORC Code but has identified an Exploration Target. With further exploration, this target has potential for between 150Mt to 200Mt of coal in Tsant Uul coal project area. The potential quantity and grade is conceptual in nature and there has been insufficient exploration to define a Mineral Resource in accordance to the JORC Code. As such it is uncertain if further exploration will result in the determination of a Mineral Resource. Further Hunnu cautions that in order to achieve this target, substantial exploration is required to further geologically map, detect, trench and drill test the defined conceptual target. On this basis, Hunnu considers that further work is warranted beyond that previously conducted.
