MUI Corporation targets China market with option to acquire Mongolia Coal license
MUI Corporation (ASX: MUI) has explained the company’s decision to option the Inner Mongolia Coal Project license as an opportunity to acquire a project licence located in the Bayanhue formation, in a proven coal, oil and gas basin.
MUI was previously involved in the industrial sector. In March, MUI completed a placement to raise A$2,500,000 through the issue of 250 million shares at $0.01 cents each to institutional and sophisticated investors.
The company recently entered into an option agreement to acquire the project licence from the Inner Mongolia Xinyuan Mining Company (IMXMC) that is located in a proven coal, oil and gas basin in the Bayahue formation.
Situated near China, the largest coal consuming country in the world, the project's proximity to the China markets would see freight cost advantages and delivery times building economies of scale for the business.
Also, the project’s close proximity to infrastructure would potentially provide access to high demand coal customers generating faster returns at less cost.
For example, near the project licence in Xilin Gol, Datang Group (SHA: 601991) operates an existing mine that has a 30 million tonne capacity per annum and delivers to local power plants.
Harry Fung, managing director, said “we are excited about the project because it shows great promise for significant upside to our shareholders. We will be meticulous in our approach to this project for we believe it has great potential for MUI.”
A significant proportion of the consideration payable to IMXM by MUI would be satisfied through the issue of shares, "demonstrating the confidence of IMXMI in the Project."
However, IMXMC must show the viability of the project by distinguishing a 750 million tonne coal JORC Inferred Resource to proceed with the acquisition.
IMXMC conducted initial exploration at the project late last year with a 4,500 metre drill program consisting of nine drill holes and eight well logging with 216 core coal samples collected and assayed.
IMXM has advised that the initial exploration on the Project, between September and December 2010 has
covered 4,500m of a drilling program, consisting of 9 drill holes and 8 well logging. 216 core coal samples have
been collected and assayed. The current drilling program is based on 2,000m by 2,000m scale.
IMXM has advised MUI that it has discovered coal in the Licence area and will commence the next phase of the
drilling program promptly, with a view to defining a JORC compliant coal resource.
MUI was previously involved in the industrial sector. In March, MUI completed a placement to raise A$2,500,000 through the issue of 250 million shares at $0.01 cents each to institutional and sophisticated investors.
The company recently entered into an option agreement to acquire the project licence from the Inner Mongolia Xinyuan Mining Company (IMXMC) that is located in a proven coal, oil and gas basin in the Bayahue formation.
Situated near China, the largest coal consuming country in the world, the project's proximity to the China markets would see freight cost advantages and delivery times building economies of scale for the business.
Also, the project’s close proximity to infrastructure would potentially provide access to high demand coal customers generating faster returns at less cost.
For example, near the project licence in Xilin Gol, Datang Group (SHA: 601991) operates an existing mine that has a 30 million tonne capacity per annum and delivers to local power plants.
Harry Fung, managing director, said “we are excited about the project because it shows great promise for significant upside to our shareholders. We will be meticulous in our approach to this project for we believe it has great potential for MUI.”
A significant proportion of the consideration payable to IMXM by MUI would be satisfied through the issue of shares, "demonstrating the confidence of IMXMI in the Project."
However, IMXMC must show the viability of the project by distinguishing a 750 million tonne coal JORC Inferred Resource to proceed with the acquisition.
IMXMC conducted initial exploration at the project late last year with a 4,500 metre drill program consisting of nine drill holes and eight well logging with 216 core coal samples collected and assayed.
IMXM has advised that the initial exploration on the Project, between September and December 2010 has
covered 4,500m of a drilling program, consisting of 9 drill holes and 8 well logging. 216 core coal samples have
been collected and assayed. The current drilling program is based on 2,000m by 2,000m scale.
IMXM has advised MUI that it has discovered coal in the Licence area and will commence the next phase of the
drilling program promptly, with a view to defining a JORC compliant coal resource.
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