Guildford Coal (ASX: GUF) has now commenced production activities at the South-Gobi open cut coking coal mine in Mongolia, with overburden being removed to just above top-of-coal.
Coal mining will proceed once surface infrastructure is in place and conformance of mining operations and facilities with submitted plans is verified.
The project consists of five tenements located in the South Gobi Province (Umnigovi Aimag) of the country, which are located around 1,000 kilometres south-west of the Mongolian capital of Ulaanbaatar.
The licenses are well situated to tap the end user market, due to being just 60 kilometres from the Chinese border station of Ceke, where coal from Mongolia is currently transported through to China.
The South Gobi Project – North Pit is has the potential to ramp up to produce in excess of 3 million tonne per annual from an open-cut coking coal operation.
The South Gobi Project has a JORC Resource of 110.9 million tonnes of coking coal consisting of:
- North Pit Indicated Resource of 39.7 million tonnes and an Inferred Resource of 30.7 million tonnes; and
- East Pit Inferred Resource of 40.5 million tonnes.
The East Pit has the potential to deliver an additional 2 million tonnes annually from an open cut coking coal operation.
The project is also strategically located 50 kilometres east of Nariin Sukhait which includes South Gobi Resources’ Ovoot Tolgoi mine and the MAK mine, which produce and export coking and thermal coal to customers in China.