Perth, Australia, Sep 3, 2014 - (ABN Newswire) - Kuro Coal Limited ("Kuro" or the "Company"), a wholly owned subsidiary of Atrum Coal NL ("Atrum")(ASX:ATU) (OTCMKTS:ATRCF), which is to be separately listed on the ASX under the code "KCO" following an Initial Public Offering, is pleased to announce it has agreed to acquire up to a 70% interest in the Elan Coking Coal Project ("Elan") located in Alberta, Canada.
The acquisition will take place through a joint venture between Kuro and Elan.
Commenting on the joint venture, Atrum Coal Executive Director and Kuro Coal Non-Executive Director Mr Gino D'Anna stated:
"Atrum is solely focused on taking its world class Groundhog anthracite project through to production, so Kuro can provide Atrum shareholders with exposure to an exciting exploration venture as well as commodity and jurisdictional diversification. The Elan acquisition is an outstanding coking coal opportunity and fits Kuro's Canadian metallurgical coal strategy."
The Elan acquisition includes 27 Alberta Crown Coal Lease applications covering a total area of approximately 23,000 hectares.
Commenting on the joint venture partnership, Elan Executive Director Gene Wusaty stated:
"This joint venture will provide Elan with the opportunity to become a tier one coking coal project. Alberta is ranked third by the Fraser Institute as the best mining jurisdiction worldwide and is host to some of the highest quality coking coal. We are excited to be working with the Kuro team."
Elan is located in the foothills and front ranges of the Rocky Mountains of Alberta, approximately 30 km north of Coleman in Alberta. Historic work has divided the property into Savanna Creek, Isola Peak, Isolation Ridge, Isolation South (Oldman River or OMR), Wildcat (Cat Mountain) and Grassy North (Oldman River South) areas.
The Elan project comprises 27 Alberta Crown Coal Lease applications covering an area of approximately 22,951 hectares. In Alberta, coal lease applications provide the right to explore the land within the boundaries of the lease and are granted for a term of 15 years with an option to extend at expiry. Once the lease applications have been granted, Elan must pay an annual rent of $3.50/hectare to the Alberta government to retain the project, as well as royalties according to the Coal Royalty Regulation upon the commencement of commercial production. The necessary permits to undertake exploration are currently held by Elan.
The majority of the project can be accessed via paved highways as well as a system of limited use roads and access trails.
The development of ground access in and around the project area will allow the Company to undertake exploration with ground based drill rigs with minimal reliance on air support to conduct exploration and development.
Elan lies within the Front Ranges of the Canadian Rocky Mountains in the Crowsnest Pass area and spans the north-trending, west-dipping, Coleman, McConnell and Isolation thrust sheets. The Crowsnest Pass area is characterized by Jurassic to Lower Cretaceous rocks of the Fernie, Blairmore and Kootenay Groups, and the Crowsnest Formation.
Historical drilling on and near Elan suggests there are 10 to 16 coal seams that range from 3 to 10 m in thickness. Additional drilling in the area will confirm the economic potential of these coal seams and the Company will prioritise the drilling to enable the completion of a pre-feasibility study at Elan. Coal rank is low to medium volatile bituminous with variable but generally moderate ash content, good washability, and good coking properties.
The Property hosts a JORC compliant Indicated and Inferred Resource (in accordance with 2012 JORC guidelines) of 146.5Mt.
In addition to the current JORC Resources, Elan hosts an Exploration Target of 743Mt of low to medium volatile bituminous coal that requires additional drilling prior to completing resource definition. This Exploration Target (under section 17 of the JORC Guidelines 2012) is based on drilling completed by previous explorers together with historical trenching, adits, mapping and sampling of coal outcrops across the project area.
The Exploration Target quantity and quality is conceptual in nature. There has been insufficient exploration to define a mineral resource and it is uncertain if further exploration will result in the Exploration Target being delineated as a mineral resource.
Grassy North, which falls within Livingstone Trend, has been identified as the primary exploration target. This target is located on the southernmost leases of the Property package and is proximal to established infrastructure. Pursuant to the joint venture, over the next 6 months the Company plans to undertake a drilling program at Elan which will focus on twinning a select number of historical drill holes to confirm coal seam thickness and coal quality. This additional information will also assist the Company in confirming the Exploration Target with a view to using modern exploration techniques to convert a part of the Exploration Target into a mineral resource in accordance with JORC 2012 guidelines.
Previous Exploration & Development
Coal exploration on and around the Elan project began in 1949, extending to 1976. Additional exploration was completed between 1971 and 2002.
The southern part of Elan is highway accessible by driving approximately 20 km north from Coleman via Kananaskis Highway. The northern part of the property can be accessed 42 km north of Coleman, via the Kananaskis Highway and the Oldman River Route. These routes provide maintained access to the limited-use road network that reaches, from south to north, the Isolation South (OMR), Isolation, and Savanna areas. Transport to and from the property is by 4x4 truck and ATV.
A secondary Canadian Pacific rail line runs through Coleman and connects with the main CNR east-west line for access to Vancouver and Prince Rupert ports or as far as the Great Lakes eastwardly. The nearest airport is located in Pincher Creek, Alberta, approximately 50 km east of Coleman along Highway 3 (Crowsnest Hwy). Accommodation, food, fuel and other necessary services are available in Coleman and Blairmore, Alberta, which are located 10 to 60 km south of the property. Coleman and Blairmore have a combined population of approximately 4,000. The local economy is primarily based on tourism, forestry, and coal-mining. Several coal mines, including Teck Coal and Coal Mountain mines, are currently in operation in the area.
Panorama Anthracite Project
On 1 May 2014, Atrum announced that Kuro would develop the Panorama Anthracite Project ("Panorama") under joint venture. Atrum has subsequently reviewed the geological information for the Panorama region and its corporate strategy going forward. In light of Atrum's strategy to be the world's largest producer and exporter of high grade anthracite, it has decided to retain Panorama as it has the potential to contribute significantly to the overall multi-mine strategy. Kuro will not be developing Panorama.
Atrum will be undertaking exploration at Panorama as soon as a Notice of Works has been granted for the relevant coal licences.
Kuro has now completed all of its intended pre-listing acquisitions and considers that it has the right portfolio of exploration and development assets to progress its ASX listing. The Company will now move to update the required independent expert reports, revise the Notice of Meeting and revise the Prospectus in preparation for formal ASX listing in Q4 this year.
Atrum shareholders can expect to receive a Notice of Meeting by mail in the next three weeks which will outline the IPO timetable as well as set the Record Date. Atrum shareholders will be entitled to receive one free Kuro share for every four Atrum shares held at the Record Date.
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About Atrum Coal NL:
Atrum Coal NL (ASX:ATU) (OTCMKTS:ATRCF) is an emerging metallurgical coal explorer and developer.
The Company has a substantial coal position in British Columbia which, as a region boasts:
- Abundance of high quality PCI, coking and anthracite coals
- Well developed rail and port infrastructure with excess capacity
- Access to deep sea ports
- Competitive shipping distance to Asia
- Positive government stance on mining
The Company is building a quality portfolio of metallurgical coal assets suited to the Asian export market and the Board of Directors have a strong track record in identifying and developing world class coal assets in Australia and abroad.
Atrum Coal NL