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Colonial Coal announces results of Huguenot Project

Coal News - Published on Thu, 12 Jul 2018

Image Source: SteelGuru
Colonial Coal International Corp announced that the results of a recently up-dated Preliminary Economic Assessment for the Company’s 100% owned Huguenot hard coking coal project located approximately 85 kilometres southeast of Tumbler Ridge in northeast British Columbia.

The original PEA report was prepared in 2013 by Norwest Corporation and the results were the subject of a news release dated September 24, 2013. The up-dated PEA report, prepared by Norwest now Stantec Consulting Services Inc in accordance with CSA National Instrument 43-101 standards, will be completed and filed on SEDAR (the System for Electronic Document Analysis and Retrieval) within 45 days. The results of the up-dated PEA show that the Huguenot Project continues to demonstrate positive economics, and that it is worthy of continued exploration and development.

In summary, Stantec used previously reported (2013), in situ, and potentially mineable resources plus the 2013 conceptual mine plan to exploit the coal resources through a combination of open pit and underground mining, and up-dated scoping-level cost estimates and economic analyses for the Huguenot Project.

Highlights of the up dated PEA report respecting the Huguenot Project are summarized as below. All costs are in US dollars but, where Canadian dollar equivalents are provided, they have been converted using an exchange rate of USD 1.00 equals CAD 1.30.

1. The Huguenot Project has an indicative after-tax (and royalty) net present value of Usd 1,166 million (CAD 1,516 million), using a 7.5% discount rate, and an IRR of 33%, based on a coal price of USD 172.00 per tonne.

2. The financial analysis suggests that the “break-even” price is less than USD 116, USD 120, and USD 125 per tonne for discount rates of 5%, 7.5% and 10%, respectively. It also indicates that for a 15% IRR, a minimum coal price of USD 135 would be required.

3. The Huguenot Project has a total projected mine life of 31 years, with the open pit (Years 1 - 14) and underground (Years 3 - 31) operating simultaneously during Years 3 – 14.

4. Measured and indicated in-situ coal resources total 277.7 million tonnes (132.0 million tonnes surface mineable plus 145.7 million tonnes underground mineable). Inferred resources total an additional 119.2 million tonnes (0.5 million tonnes of surface mineable plus 118.7 million tonnes underground mineable).

5. Huguenot Project’s potential coal production is identified as hard coking coal similar to coking coal currently exported from northeast British Columbia.

6. The base coal price, of USD 172.00 per tonne, used for the study represents a discount of USD 13.00 per tonne from a projected long-term benchmark price of USD 185 per tonne for premium low volatile hard coking coal.

7. The PEA economic analysis is based on a conceptual open pit mine plan targeting 56 million run-of-mine tonnes of resource at an average stripping ratio of 8.6 :1 (bank cubic metres (bcm) :ROM tonnes) plus a conceptual underground mine plan that targets an additional 66 million ROM tonnes of resource.

8. The Huguenot Project has total projected clean coal production of 89 million tonnes over a mine life of 31 years.

9. Projected clean coal production from combined surface and underground mining operations ranges from 1.4 million tonnes per annum to 5.9 Mt/a, averaging approximately 3.0 Mt/a.

10. Projected clean coal production from the open pit averages approximately 3.2 Mt/a in Years 1 through 12 and 1.8 Mt/a from underground from Years 5 through 31.

11. The Huguenot Project’s proposed payback of initial capital is estimated within 5 years from start-up of operations.

12. The Huguenot Project’s cash operating costs are estimated at USD 67.20 per tonne clean coal at the mine loadout.

13. The Huguenot Project’s estimated direct plus offsite costs (ie, FOB cost), total USD 95.50 per clean tonne (excluding production taxes and royalties).

Source :

Posted By : Joykumar Irom on Thu, 12 Jul 2018
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