Cardero Resource Corp. and Ridley Terminals Inc. said May 22 that they have reached agreement on terms for the shipment of metallurgical coal from Cardero’s in-development Carbon Creek deposit in British Columbia.
The agreement has a 15-year term from Jan. 1, 2014, to Dec. 31, 2028, with provision to extend the term by three years to Dec. 31, 2031. Contract volume is set at 500,000 tonnes per year through 2014, increasing to 900,000 tonnes per year in 2015. The agreement is subject to Ridley Terminals receiving Canadian federal government approval for addition of a fourth stacker/reclaimer that will increase capacity from 24 million tonnes per year to 30 million tonnes per year. Approval is expected in 2012.
Ridley Terminals President George Dorsey said: “Ridley Terminals is a world-class coal export facility striving to meet the rapidly increasing capacity demands of the domestic metallurgical coal producers. We expect Cardero’s Carbon Creek deposit to be an ongoing component of our long-term operating plan as we grow our capacity over the coming years.”
“We are very pleased to have signed this Phase I agreement with Ridley Terminals,” said Michael Hunter, Cardero President and CEO. “It is a key milestone in the advancement of our Carbon Creek asset and greatly reduces project risk. Having addressed the needs for the expected mine start-up, Cardero will continue to work with Ridley Terminals to secure additional port capacity which meets our full anticipated production requirements.”
Cardero’s Cardero Coal Ltd. subsidiary started the pre-application process May 9 at the British Columbia Environmental Assessment Office for a new surface and underground metallurgical coal mine with an average annual production rate of 2.9 million tonnes of clean coal. The Carbon Creek project is located in northeastern BC about 40 kilometers west of Hudson’s Hope. The Canadian National rail line connecting the Fort St. John and Tumbler Ridge areas with Prince George passes 30 kilometers south of the property.
In the project area, coals of the Gething Formation are primarily ranked as mid-vol bituminous. Gething coals have produced satisfactory met products, particularly after beneficiation. A full program of sizing, washability, and metallurgical testing will occur in conjunction with more advanced engineering and economic analyses.
The project will require surface mining followed by combined surface and underground mining. Approximately three-quarters of the current defined resource could be mined underground. The mine will be designed to achieve an annual average production rate of 2.9 million tonnes of clean coal. The wash plant will have a 15,000 tonne per day capacity. The life-of-mine has been financially modeled to 30 years, based on comparable operations in North America.
Ridley Terminals is a federal crown corporation that is located in Prince Rupert, British Columbia. Ridley Terminals is the most northern deepwater port in North America and has the capacity to handle capesize vessels up to 250,000 deadweight tonnage. Current handling capacity is 12 million tonnes per year, which is undergoing an expansion up to 24 million tonnes per year. The facility is serviced by the Canadian National.