Atrum Coal NL (ASX:ATU) (OTCMKTS:ATRCF) said April 30 that it continued to make progress in the first quarter of this year in relation to its flagship Groundhog Anthracite Project and the advanced development of the Groundhog North Mine located in British Columbia, Canada.
A supplementary Pre-feasibility Study (SPFS) delivered improved economics for a 5.4 million tonnes per year run-of-mine (ROM) underground operation at Groundhog North compared to the original PFS. The mine life was substantially increased from 16 years to 38 years. FOB cash costs were reduced from US$89/tonne to US$86/tonne on truck-to-port operation. The capital required to deliver a small-scale underground bord and pillar mine (250,000 tonnes per year) was reduced 25% from US$77 million to US$58 million.
A memorandum of understanding (MOU) and offtake marketing framework agreements have been executed with consumers of high-grade and ultra-high-grade anthracite in Japan and Korea. Dscussions also commenced with potential Chinese and Indian offtake entities
Atrum is in advanced negotiations with a select number of resource specialist Private Equity funds and specialist equipment financers and continues to progress discussions with strategic offtake partners from Japan and Korea for a direct equity investment into Groundhog North. Atrum expects to announce positive news on these negotiations in the next week
Commenting on the quarterly achievements, Executive Chairman James Chisholm stated: “The year started well with lump anthracite prices strengthening, selling for more than US$210/t as of last month, with upward pressure due to long term declining Vietnamese and Ukrainian seaborne supply. We expect this trend in prices to continue during the course of our mine development. The past quarter has been an active one for Atrum. On the marketing side, in addition to coke replacement, we have identified several high value market opportunities for our ultra-high grade anthracite and these were incorporated in our negotiations with tier one offtake partners. We have secured multiple offtake MOU’s with some of the world’s largest steel conglomerates as a precursor to binding offtake and a direct project sell down of our first mine, Groundhog North.
“On the exploration front, we have identified potential for multiple mine sites at other areas of Groundhog. Within the Groundhog North zone, we have also identified several new, shallow, low strip ratio, low-cost, surface mining opportunities that would complement the existing Groundhog North Underground Mine. This is an exciting development and has the potential to provide significant upside and low cost expansion possibilities.
“Right now, we are eagerly awaiting the grant of our first permit, which will allow us to deliver trial cargos to equally eager customers later this year. We are also advanced in our process to secure a significant funding package that will allow us to commence development at Groundhog North following receipt of our permits. The next three months will be exciting times and we look forward to keeping you informed as we progress.”