Prophecy Coal reports results of PEA for Mongolian coal project
TORONTO (miningweekly.com) – TSX-listed Prophecy Coal on Friday said a preliminary economic assessment (PEA) for its two Chandgana Tal mining licenses, in central Mongolia, contain an estimated 124-million tons of coal in the measured resources category, providing for a potentially economically viable project.
The PEA examined the economics of coal production from the mining licenses and excluded the Chandgana Khavtgai exploration license. Prophecy's wholly owned subsidiary Chandgana Coal intended to mine the coal and supply it to the proposed 600 MW Chandgana mine-mouth power plant, which is planned to be operated by Prophecy subsidiary Prophecy Power Generation.
The PEA found the average in-place coal gross calorific value is 3 306 kcal/kg.
After a short ramp-up period, mine production would be 3.5-million tons a year throughout the 30-year life of the mine, to meet the demands of the power plant. The mine could produce 103.9-million tons of coal over the life of the mine.
The mine would comprise an openpit mine and is located 2 km from the proposed power plant site.
The average coal seam thickness is 50 m and the overburden is relatively thin, making for a low average strip ratio of 0.70:1 over the life of the mine.
The mine could be constructed at a cost of about $31-million, while the life-of-mine capital costs were expected to total $160.2-million. The project has an internal rate of return of 36% and it would take four years to pay back the initial capital expenditures.
The PEA used a coal price of $17.70/t sold at the mine gate to the power plant and estimated the project to have a net-present value of $70.5-million using a 10% discount rate.
The company’s Toronto-listed shares traded 3.7%higher at 14 Canadian cents apiece on Friday.
Edited by: Creamer Media Reporter
The PEA examined the economics of coal production from the mining licenses and excluded the Chandgana Khavtgai exploration license. Prophecy's wholly owned subsidiary Chandgana Coal intended to mine the coal and supply it to the proposed 600 MW Chandgana mine-mouth power plant, which is planned to be operated by Prophecy subsidiary Prophecy Power Generation.
The PEA found the average in-place coal gross calorific value is 3 306 kcal/kg.
After a short ramp-up period, mine production would be 3.5-million tons a year throughout the 30-year life of the mine, to meet the demands of the power plant. The mine could produce 103.9-million tons of coal over the life of the mine.
The mine would comprise an openpit mine and is located 2 km from the proposed power plant site.
The average coal seam thickness is 50 m and the overburden is relatively thin, making for a low average strip ratio of 0.70:1 over the life of the mine.
The mine could be constructed at a cost of about $31-million, while the life-of-mine capital costs were expected to total $160.2-million. The project has an internal rate of return of 36% and it would take four years to pay back the initial capital expenditures.
The PEA used a coal price of $17.70/t sold at the mine gate to the power plant and estimated the project to have a net-present value of $70.5-million using a 10% discount rate.
The company’s Toronto-listed shares traded 3.7%higher at 14 Canadian cents apiece on Friday.
Edited by: Creamer Media Reporter
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