Tuesday, 04 Oct 2011
Guildford Coal is evaluating an IPO of its 70% owned subsidiary Terra Energy after an upgrade in its Exploration Targets in its Mongolian coal projects to 30 million tonnes to 1.38 billion tonnes.
Guildford would remain a significant shareholder in Terra Energy. Both the South Gobi Project and the Middle Gobi Project are held via the stake in Terra Energy.
The South Gobi Project is edging closer to a maiden JORC resource in October 2011 and a Mining Licence application is being prepared for the project. The Exploration Target has been increased from 0 to 700 million tonnes.
The project is also strategically located approximately 50 kilometres east of Nariin Sukhait which includes SouthGobi Resources' Ovoot Tolgoi mine and the MAK mine which currently produce and export coking and thermal coal to customers in China.
The near surface coal geology of the South Gobi region and competitive labour rates allow for low-cost production with average ROM cash costs estimated at USD 20 a tonne. Selling prices for unwashed ROM coal are estimated at between USD 40 a tonne and USUSD 50 a tonne purchased at mine gate.
The South Gobi Project has the potential for near term development into a 1-to-2 million tonne per annum open-cut coking and thermal coal mine.
Preliminary estimates of the project are that it could have potential for high quality low sulphur coking coal.
(sourced from ProActiveInvestors)
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