Since the Company disclosed amended estimates and analysis in the CPR and in investor materials, for NI43-101 purposes the Previous Report is no longer current and the aggregate changes are material changes in relation to the Company which have triggered a requirement to file an updated technical report in compliance with the requirements of NI43-101.
The Company has retained IMC who are in the process of preparing and filing the Updated Report which should be available in due course. Because of the material changes in relation to the Company detailed in the CPR which have required an update to the Previous Report, investors and shareholders should not place undue reliance on the Previous Report.
Upon publication of the Updated Report, the Company will re-file this MD&A, the MD&A for the three months ended June 30, 2013 and also re-file its Annual Information Form for the year ended December 31, 2012 on SEDAR to reflect the changes to the Company's technical disclosure set out in the Updated Report.
Verticalnaya is located in the Donbass region. A number of settlements lie in the vicinity including the towns of Lunacharsk, Leninskiy, Volodarsk, Ustinovka and the villages of Malomedvezhje and Fedorovka; the latter is located only 1.5 kilometers from the mine.
EastCoal has been issued a mining license which allows the Company to extract coal from seams H11, H11B, H10B, H8 and H8B within the license area. This license is valid for 20 years from the date of issue and expires on July 19, 2027.
EastCoal leases a land area totaling 23.73 Ha on which the main mine and process facilities, rail and road infrastructure and waste storage areas are located. The site leased for the VNP mine access and surface facilities occupies a slightly elevated position approximately 1.5 kilometers north-west of the main Verticalnaya Mine site.
The shaft mine industrial surface covers some 10.4 Ha including 3.0 Ha of approach roads. Located in a rural area it has electrical power supply, mains water, mains sewage, and good access roads already established.
The VNP mine and surface facilities are easily accessible by road from the main Verticalnaya site and located nearby is a rail line with facilities for wagon loading. A new 6 kV power supply has been installed from the main Verticalnaya mine surface sub-station to the VNP site.
The Verticalnaya Mine has two shafts. The materials shaft was installed and has been operational for the transportation of men and material since 1975. The sinking of the second shaft was completed just prior to the mine closure in 1998 and was not fully equipped or commissioned.
2.2.4 Mine History
Mining operations began initially during 1912 when coal was accessed from its outcrop point on the surface via inclined drifts locally known as "number 10 mine". In 1975, mainly for ventilation purposes, a vertical shaft was sunk down to the then lower workings at the -600 meters horizon, approximately 845 meters below surface. This shaft was then used for the transportation of men and materials. Also installed within the same shaft is a second winding facility designed to wind out waste rock from development drivage.
Several phases of exploration drilling have been completed by the ministry since 1930, the most extensive phase being during the 1970s when over 200 cored boreholes were drilled in the area of the Verticalnaya and adjacent mines.
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