Ovoot Early Development Plan DFS Update: Aspire Mining

Ovoot Early Development Plan DFS Update: Aspire Mining

Leading pure-play metallurgical coal project developer Aspire Mining (ASX: AKM) has provided an update on progress towards completion of a Definitive Feasibility Study for the early development of the world-class Ovoot Coking Coal Project in Mongolia.


HIGHLIGHTS

·       Aspire continues to engage with the local community to provide ground access to complete the technical drilling and associated studies required to complete the Definitive Feasibility Study (DFS).

·       As previously noted, DFS progress is subject to securing approvals for the Ovoot Mine and the Ovoot-to-Erdenet Road. Given the continued delays in receiving these approvals and the onset of winter, it will be impossible to complete hydrological and geotechnical drilling before the end of 2019.

·       While other components of the DFS are progressing, it is now likely the DFS will not be completed until May 2020.

·       Assuming finance is secured and the above permits are received by Q1 2020, pre-stripping of waste can occur from Q2 2020.

·       Based on the PFS outcomes for the Extended Case, the OEDP will generate an internal rate of return of 44.5% on a before tax basis and will provide total direct and indirect employment for 1200 workers and deliver $US850 million in royalties and taxes to Mongolia.

·       Management has recently visited a number of steel mills in North East China. The response was very encouraging with a number using or having used Mongolian sourced coals previously.

·       Fenwei Energy Information Services has confirmed that “Mongolia will surpass Australia as China’s top coking coal supplier” in the mid to long term.

·       Documentation is well advanced for the upcoming shareholders’ meeting to consider the $33.5m placement at 2.1 cents a share (a 60% premium to the current share price) which would see major shareholder Mr Tserenpuntsag increase his shareholding from 27.5% to a controlling 51% interest.

As announced on 28 February 2019, the Company received the results of a Pre-Feasibility Study (PFS) for the first-stage Ovoot Early Development Plan (OEDP) by first constructing a haul road able to deliver up to 4 million tonnes per annum (Mtpa) of coking coal to the nearest rail head at Erdenet. From there, the coal can be railed north or south to export markets.

Delays in Approvals for Road Alignment and Ovoot Drilling for the DFS

Aspire has been actively engaged with the Khuvsgul airmag in terms of an acceptable alignment for the Ovoot-to-Erdenet special purpose coal haul road. There is currently no road connecting the local Tsetserleg soum with the Khuvsgul capital of Murun and this is a key benefit of the OEDP development.

The Khuvsgul airmag administration is currently considering the Ovoot-to-Erdenet Road as it passes within the airmag as part of a 2030 road development plan. The administration also needs to negotiate with the various soums, villages and herder groups impacted by the road alignment. Until the road alignment in Khuvsgul is approved it is not possible to complete the definitive road engineering studies.

The Company has continued with its positive engagement with the local community. Local community leaders are awaiting confirmation of the road alignment before providing their support for further ground activities at Ovoot.

As noted in the Company’s 23 May 2019 update and in the June 2019 Quarterly Activities Report, progress on the DFS is subject to securing approvals for the Ovoot Mine and the Ovoot-to-Erdenet Road.

Given the continued delays in receiving these approvals, combined with the onset of winter, it is now clear that Aspire will not be able to complete critical hydrological and geotechnical drilling to a required DFS standard prior to the onset of winter.

The low temperatures experienced on site would impact on the results if drilling was attempted. Temperatures are not expected to be suitable for hydrological and geotechnical drilling until March/April 2020.

The Company will be completing other components of the DFS in the interim, with final inputs subject to the completion of this work. Infill drilling for detailed mine planning and customer samples can continue through winter.

View the full announcement

Gold Road attains commercial production at Gruyere

Gold Road attains commercial production at Gruyere

Numerous high-grade spodumene intersections across Finniss

Numerous high-grade spodumene intersections across Finniss