EastCoal Inc Updated Technical Report on Verticalnaya Coal Mine (4762N)
09 September 2013 - 8:00AM
UK Regulatory
TIDMECX
RNS Number : 4762N
EastCoal Inc
09 September 2013
September 9, 2013
Updated Technical Report on Verticalnaya Coal Mine
Vancouver, British Columbia - EastCoal Inc. (TSX VENTURE:ECX,
AIM:ECX) (the "Company" or "EastCoal") is pleased to announce that
it has filed an updated National Instrument 43-101 - Standards of
Disclosure for Mineral Projects ("NI 43-101") compliant technical
report on its Verticalnaya Mine, Ukraine.
The updated technical report presents the latest business plan
for the development of the Verticalnaya anthracite mine, which has
two mine sites. As presently envisaged, the original mine will be
used to access the old, currently flooded, mine workings and to
extract the undeveloped Coal Reserves in the H8 coal seam. The
second site, known as the Verticalnaya North Project ("VNP") site,
is being used to develop two surface drifts to access the Coal
Reserves in the H11 and H11B seam.
The economic evaluation included in the NI43-101 reflects the
Company's strategy to initially increase production at the VNP to
circa 11,000 tonnes per month by December 2013, prior to ramping up
the mine to its full capacity over time. The current plan indicates
a decision regarding the further ramp-up of production will be
taken during the 1st half of 2014. The economic evaluation includes
the initial development costs and capital expenditure required for
such a ramp-up of production to be incurred commencing 2014. The
2014 forecast numbers include circa $3 million of development
costs, included in operating costs, and circa $12.5 million of
capital expenditure that relate to the ramp-up and the removal of a
gas pipe line. If warranted by market conditions at the time, the
Company could temporarily delay the removal of the gas pipe and the
development cost and capital expenditure related to the ramp-up,
and continue production at 11,000 tonnes per month.
The project has a net present value ("NPV") of US$ 330.2
million, at a discount rate of 10%. Based on a post-2015 real price
increase per year of 2%, NPV at 10% discount rate is increased to
US$453.9 million. The evaluation was prepared on an all equity
basis and excludes the possible benefit from debt finance on
certain large capital items. The NPV has varied due to a detailed
review by the Company of its mine plan, associated capital and
operating costs as well as a reduced sales price in light of
current market conditions. Average operating cost per tonne
assessed over the life of mine for H8 Seam is US$31.83/tonne
saleable and for H11 Seam is US$25.58/tonne saleable. The internal
rate of return is 62.1% and the payback period is 6 years.
The Technical Report, prepared by IMC Group Consulting Ltd. of
the United Kingdom, is available on Sedar (www.sedar.com) and the
Company's website (www.eastcoal.ca). It updates the "Amended
Pre-Feasibility Study Report on the Verticalnaya Mine, Ukraine",
dated June 2012. It also updates the Competent Persons Report
("CPR") filed as part of the Company's admission to trading on the
AIM market of the London Stock Exchange plc and in accordance with
the AIM rules. The CPR disclosed a 26% increase (from the Previous
Report) in JORC-compliant total resources (inclusive of reserves),
and an amended economic analysis, with a downgrade of some reserves
from proved to probable class.
Upon publication of the updated report, the Company will also
re-file its annual information form for the year ended December 31,
2012 on SEDAR as well as its annual management discussion and
analysis ("MD&A") and the MD&As for Q1 and Q2, 2013 to
reflect the changes to the Company's technical disclosure set out
in the updated report.
Mr. David J.F. Smith, C. Eng., MIoM3, BSc (Eng), is the
Qualified Person responsible for reviewing the accuracy of this
news release in compliance with NI43-101 and the AIM Guidance Note
for Mining and Oil & Gas Companies.
Neither the TSX Venture Exchange nor its Regulation Services
Provider (as that term is defined in the policies of the TSX
Venture Exchange) accepts responsibility for the adequacy or
accuracy of this release.
This press release contains projections and forward-looking
information that involve various risks and uncertainties regarding
future events. Such forward-looking information can include without
limitation statements based on current expectations involving a
number of risks and uncertainties and are not guarantees of future
performance. There are numerous risks and uncertainties that could
cause actual results to differ materially from those expressed in
the forward looking information. These and all subsequent written
and oral forward-looking information are based on estimates and
opinions on the dates they are made and are expressly qualified in
their entirety by this notice. Except as required by law, EastCoal
assumes no obligation to update forward-looking information should
circumstances or management's estimates or opinions change.
For more information please contact:
EastCoal Inc.
Abraham Jonker, President and Acting CFO
+1 (604) 973 0079 / +1 (604) 992 5600 (Cell)
www.eastcoal.ca
Cenkos Securities plc
Ken Fleming
+44 (0) 207 397 8900
Alan Stewart/Derrick Lee
+44 (0) 131 220 6939
Tavistock Communications
Jos Simson/Emily Fenton
+44 (0) 207 920 3150
This information is provided by RNS
The company news service from the London Stock Exchange
END
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