Modun Resources eying more coal assets in Mongolia

Modun Resources has been reinstated to the ASX on the news that the company will acquire a large, pre production coal project in the South Gobi Coking Coal District, Mongolia.

The company already owns the Nuurst thermal coal project in Central Mongolia, which already hosts a coal JORC Resource of 489 million tonnes.

The latest acquisition of the advanced mining Ha (Tsaagan Tolgoi) project with mining license and JORC resource of 45.4 million tonnes is a very neat fit with Nuurst, adding further upside for Modun Resources.

There is also an Exploration Target of 150 million tonnes to 250 million tonnes of high quality thermal coal and potential coking coal in the South Gobi Coking Coal District.

Modun Resources has planned production from an open pit on the Tsaagan Tolgoi mining licence from December 2012. The Tsagaan Tolgoi Project is located on an existing mining licence (expiring 2038) 95 kilometres north of the Chinese border, 80 km south of Mongolia’s renowned 6 billion tonne coking coal project, Tavan Tolgoi, and 100 km west of the existing paved road and planned rail link into China.

To fund the purchase, Modun will place 187.5 million shares at USD 0.04 to raise USD 7.5 million, comprising of two tranches. Tranche one is 105 million shares, with tranche two subject to shareholder approval.

The vendor SouthGobi Resources Ltd will become a 14.9% shareholder of Modun Resources upon approvals.

The acquisition includes two mining licenses. The first known as Tsagaan Tolgoi, is 10,500 hectares which already hosts an exploration target of 150 million to 250 million tonne (grading Qadb 5300 kcal/kg to Qadb 6500 kcal/kg) of high quality thermal coal and potential coking coal.

Tsaagan Tolgoi currently has a 45.4 million tonne coal JORC Resource which has been defined from just 5% of the mining license area.

Significant resource extension work has already been planned at Tsaagan Tolgoi for the 2012 drilling season, with a planned open pit coal production from December 2012.

The second part of the acquisition is the 26,700 hectare exploration licence known as Ajlyn Talbai, located in the South Gobi Coking Coal District.

Source - Proactive Investor

(www.steelguru.com)

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