COAL STUDY: Reserves, mine life up for Arctos (Mount Klappan) project

BRITISH COLUMBIA – The updated feasibility study for the Arctos anthracite project 150 km northeast of Stewart boasts more reserves, a longer mine life and expansion potential compared to earlier studies. The property is 80% owned by Fortune Minerals of London, ON, and was previously called the Mount Klappan project. The remaining 20% is owned by POSCAN, the Canadian subsidiary of Korean steel producer POSCO.

The current feasibility study is based on an open pit mine and wash plant producing 3.0 million t/y of clean coal. The product will be premium 10% ash ultra-low volatile PCI coal, although the ability to adjust the output to include other products will be incorporated.

Other upsides noted in the current study include

• 17.5% increase in run of mine coal reserves to 124.9 million tonnes and an increase in the 10% ash product reserve to 69.2 million tonnes in the Lost Fox deposit.
• The mine life will be extended to 25 years rather than 20.
• Cash costs FOB in Prince Rupert will be $127.61/tonne.
• The base case appraises the pre-tax internal rate of return at 17.0% and the pre-tax 8% discounted net present value of $615.9 million.
• There is potential to expand output to 4.0 million t/y clean coal, boosting the pre-tax IRR to 17.5% and 8% discounted NPV to $675.1 million.

Fortune’s next steps involve continuation of the environmental assessment, community engagement, and continuing talks with Canadian National regarding railway capacity to the port at Prince Rupert.

See also FortuneMinerals.com.