COAL STUDY: PFS examines 3.5M-t/y Donkin project

NOVA SCOTIA - The preliminary feasibility report is completed on the Donkin metallurgical and thermal coal project in Cape Breton. It was prepared for joint venture partners Xstrata Coal Donkin (75% and operator) and Erdene Resource Development (25%) of Halifax. The study assessed the viability of a multiple continuous miner underground operation that would mine 3.5 million tonnes yearly. After washing, the project will offer 2.75 million t/y of coking coal for export and thermal coal for domestic consumption.

The PFS concludes that Donkin has a $1.06 billion net present value (8% discount rate) based on project development capital of approximately $500 million and demonstrates the potential for first quartile operating costs. The Hub and Harbour seams together contain an indicated resource of 174 million tonnes, including 58 million tonnes of probable reserves.

The project will proceed to the feasibility stage. More information is posted at www.Erdene.com.