Wednesday 29 July 2009

Jameson Resources has strong quarter as Basin Coal mine momentum, pushes shares higher

Jameson Resources (ASX: JAL) investors have alot to crow about during the June quarter - the share price was up a tidy 182% to 48 cents.

Here are the reasons why.

A resource upgrade from 19 Mt to 117 Mt of bituminous thermal coal the Basin thermal coal mine in British Columbia, Canada substantially increased potential for extended mine life.

The Resource classification includes 82.3 Mt measured/indicated and 35.1 Mt inferred at cut off stripping ratio of 8:1 (BCM: tonne raw coal). Measured Indicated and Inferred Resource is based on the Canadian NI43‐101 guidelines.

Indicative coal quality tests yielded 5,780 kcal/kg (AR), 12.5% ash, 10.5% moisture, and 0.57% sulphur returned from first phase of bulk sample test work.

A placement was made at 25 cents per share to raise funds from overseas based institutional investors provided first tranche of working capital required for recommissioning of the Basin thermal coal mine.

Several existing coal transportation options are under review with capacity available at port. Basin is the closest mainland coal project to the Western Canadian ports and has good rail and road access with significant available capacity. The existing infrastructure, including logging roads, loading facilities and rail, will significantly minimize the capital required to recommence operations.

Interesingly, Canada is emerging as an alternative supplier for high quality thermal coal with its available port capacity. 2008 estimates show Asia importing approximately 18.5 million tonnes of coal from Canada which is 500,000 tonnes up from 2007. In 2007, Japan and South Korea were the two leading buyers of Canadian coal with 10.6 million tonnes and 6.1 million tonnes respectively.

Approvals are in place to re‐start mining and processing operations at Basin within 12 months.

Independent consultant, Norwest Corporation anticipates completion of the recommissioning study on the Basin coal mine Mine in Q3 2009. Norwest Corporation is undertaking a feasibility study on behalf of the Company to develop a project implementation schedule to recommission the project as a low cost open pit coal mine under the existing 250,000 tpa mining permit.

Preliminary scoping studies and environmental assessment are also being undertaken to assess the viability of an expanded production scenario of approximately 1M tonnes per annum. Pending successful outcome of the study, production could commence within 12 months.

Discussions with potential domestic and overseas off‐take partners are advancing. These include international utilities and local cement manufacturers. Cash balance was $3.2 million.

www.proactiveinvestors.com.au

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