Although Western Europe and the Mediterranean region continue to be key end markets for Atlantic Basin seaborne coal, growing demand in China and India, together with low seaborne freight costs, have altered the structure of coal markets. More recently, the coal industry experienced significant supply disruptions due to heavy rains in Australia, Indonesia and Mozambique, as well as rail and labour issues in South Africa, New South Wales and Colombia.
It is anticipated that Donkin coal, with its high energy, low ash, and attractive coking coal properties, along with its low operating cost and close proximity to a ready, local market and a deep-water port, will favorably position the Project among the world's coking and thermal coal producers.
Xstrata Donkin Sale Process
Morien's 75% joint venture partner, Xstrata Coal Donkin Limited ("Xstrata"), announced on April 26, 2012 that it planned to sell its interest in the Donkin Project. Xstrata and Morien indicated that "During this process, the project timelines will be maintained with the planned completion of the environmental assessment, progression of engineering work and obtaining the necessary approvals for commencement of the underground exploration phase". Xstrata had originally targeted the end of 2012 for completion of the transaction. However, as of the date of this press release, no public announcement of a prospective buyer has been made by Xstrata.
Morien has entered into discussions centered around the Xstrata sale and joining forces with an operator to act on its right of first refusal. Morien has a 60-day right-of-first-refusal to purchase Xstrata's 75% interest in the Donkin Project should Xstrata accept an offer.
Indications from Xstrata suggest sale efforts are well advanced. If the process does not come to the accepted offer stage in the near term, the Company has requested that Xstrata initiate discussions with Morien to allow for a transition of the Project to a new operating team.
It is expected that the Xstrata sale process will result in the selection of a company with the mining experience, technical expertise and financial capability to operate the proposed Donkin underground mine safely and efficiently. Following a successful sale process and on completing the CEAA process, it is anticipated by Morien that it will take approximately three months to receive the necessary Provincial government approvals to begin tunnel refurbishment. It is also estimated by Morien that this work will take six to twelve months to complete, at which point a single continuous miner can produce first coal from the underground evaluation program.
The full Project proposal includes the construction and operation of an underground coal mine with a lifespan in excess of 30 years. The 2011 Marston Pre-feasibility report states that underground operations will include multiple continuous-miners producing approximately 3.6 Mtpa of ROM coal. A coal handling and processing plant capable of processing the ROM coal will be constructed to produce approximately 2.75 Mtpa of product coal suitable for international coking coal markets, as well as international and domestic thermal coal markets.
Michael MacDonald, P.Geo. (Nova Scotia), Vice President Technical and Government Affairs, is a Qualified Person as that term is defined in National Instrument 43-101 and has reviewed and approved the technical information contained in this news release. All samples have been assayed at SGS Laboratory in Kentucky and West Virginia, USA.
Morien is a Canadian company engaged in resource development and its principal asset is a 25% interest in the Donkin Coal Project in Nova Scotia. Morien has 4,901,976 options outstanding and 49,256,240 issued and outstanding common shares. Further information is available at www.morienres.com.
This news release may contain forward looking statements based on assumptions and judgments from management regarding future events or results that may prove to be inaccurate as a result of exploration, development and other risk factors.
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.
Morien Resources Corp.
John P.A. Budreski, President and CEO
Morien Resources Corp.
Dawson Brisco, Manager Corporate Development
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