Aspire Mining Limited
ABN: 46 122 417 243
69 Kewdale Road, Welshpool WA 6106
PO Box 1918
Subiaco WA 6904
Tel: (08) 9287 4555 ASX RELEASE
Fax: (08) 9353 6974
Web: www.aspiremininglimited.com Email: [email protected]
For Immediate Release - 28 October 2016
QUARTERLY REPORT
Quarter Ended 30 September 2016
Northern Railways Investment Update
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Commenced the first stage of the Bankable Feasibility Study for the Erdenet to Ovoot Rail Project.
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Received an Expression of Interest from China Development Bank to fund up to 75% of the EPC construction cost for the Erdenet to Ovoot Railway.
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Attended tri-lateral ministerial conference in Ulaanbaatar and presented Erdenet to Ovoot Railway as a priority funding project.
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Northern Railway shown to be an efficient path for Sino-European rail based trade.
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Northern Railways LLC and its advisers continue discussions with potential funders of the second stage feasibility study for the Erdenet to Ovoot Railway.
Scoping Study into the Development of the Nuurstei Coking Coal Project Commenced.
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Preliminary pit optimisation modelling using a range of coking coal prices for the Nuurstei Coking Coal Project deposit shows that a large proportion of Nuurstei's JORC Resource base may report to an economic open pit mine.
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A scoping study has commenced for the Nuurstei Coking Coal Project and the conversion of the exploration license to a mining license has commenced.
Corporate Update
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A US$2m loan for 12 months put in place to fund time critical rail pre-development expenditure through to the March 2017 Quarter.
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Seaborne metallurgical coal prices have increased by more than 200% during 2016 as production restrictions in China and firmer than expected demand has caused supply tightness in the market. Long term price expectations in general have been raised.
Aspire Mining Limited (ASX: AKM, Aspire, or the Company), focussed on the exploration and development of metallurgical coal assets in Mongolia and the rail infrastructure required to bring production from these assets to market, is pleased to present its Quarterly Activities Report to Shareholders for the period ending 30 September 2016.
The Company is the largest coal tenement holder in the Orkhon-Selenge Coal Basin in northern Mongolia. Aspire currently wholly owns the large scale, world class Ovoot Coking Coal Project (Ovoot Project), Through its 50% ownership in the Ekhgoviin Chuluu Joint Venture (ECJV), Aspire also holds an interest in the Nuurstei Coking Coal Project (Nuurstei Project) and the Erdenebulag Coal Project (Erdenebulag Project) in the south.
Northern Railways LLC (Northern Railways), Aspire's Mongolian rail infrastructure subsidiary, is responsible for activities associated with the construction and commercialisation of the 547 km Erdenet to Ovoot railway in northern Mongolia (Rail Project). The Rail Project is a part of Mongolian Rail Policy and now has been included in the "Northern Rail" Economic Corridor, a new initiative to establish an international economic corridor between China and Russia through Mongolia and supported by all three Governments to facilitate trade between the three nations and the wider Asian and European economies.
Figure 1: Location of Projects and New Economic Corridor
OVOOT COKING COAL PROJECT (100%)
The Company continues to focus on progressing the Rail Project to provide an efficient path for Ovoot Project coking coal to reach steel mills in China, Russia and Eastern Europe.
However, in order to meet annual exploration commitments, the Company will conduct a short drilling programme in early November targeting two gravity anomalies identified south of the main Ovoot Project Resource. Planning and contractor sourcing were undertaken in the September 2016 Quarter.
Ekhgoviin Chuluu Joint Venture (50%, Option to increase to 100%)
The ECJV is a 50/50 joint venture between Aspire and Singapore listed, Noble Group (SGX: N21, Noble), which is mandated to explore and develop coal assets in Mongolia. Aspire acquired its interest in the ECJV in mid-2014 and has been granted an option by Noble to acquire its 50% stake which expires in March 2017. In the event that the Company exercises its option, Aspire's interest in the ECJV will move to 100%.
The ECJV currently holds interests in the Nuurstei Project (90%) and the Erdenebulag Project (100%).
The Company released (refer to ASX announcement 13 April 2016) a Nuurstei Project Resource Statement that reported 4.75 Mt in Indicated Resources and 8.1 Mt of Inferred Resources in accordance with the JORC Code 2012. This was based on a report received from McElroy Bryan Geological Services Pty Ltd ("MBGS"), incorporating results of work completed in the 2014 and 2015 exploration drilling programs at the Nuurstei Project.
The Nuurstei Project is located in northern Mongolia and is 10 kilometres south from the Khuvsgul airmag capital of Moron. It also lies in close proximity to a sealed road to the Erdenet connection to the Trans Mongolian Railway. The Nuurstei Project is also well placed to be an early user of the proposed Rail Project to extend the rail from Erdenet to the Ovoot Project and then further northwest to the Russian city of Kyzyl.
The Nuurstei Project is viewed as a low capital cost starter project which could assist with the development of the much larger Ovoot Project which is 160 kilometres further to the west and assist with developing logistical capabilities and market development for coking coals from northern Mongolia.
Figure 1: Nuurstei project proximity to existing rail infrastructure and Moron, capital of the Khuvsgul province in Mongolia's north
MBGS are currently developing a plan for additional drilling to both sample additional seams identified in the deposit definition process to increase the proportion of Indicated Resources and to potentially add to the overall deposit base.
Scoping Study
The ECJV have agreed to commence a scoping study for the Nuurstei Project.
An international mining contractor with a presence in Mongolia will assist in providing mining costs for a proposed mining schedule.
A logistics provider will provide transport cost estimates along with rail tariffs for delivery onto the Chinese rail system.
Float sink testwork has commenced to assist with preliminary flowsheet design and operating and capital cost estimates.
The Mining License application process is continuing with environmental surveys being undertaken to support a Definitive Environmental Impact Assessment.
It is proposed that the scoping study based on the current deposit will commence before the end of 2016, although due to weather limitations, any further drilling to potentially increase Indicated Resources may not be able to commence until the April\May 2017 Mongolian spring. The scoping study will be finalised after the results of the additional drilling are known and included in an updated geological model.