THE BOURSE WHISPERER: Mongolia-focused coal exploration play Modun Resources has announced a maiden JORC coal resource of 489 million tonnes at its wholly-owned Nuurst project.
The company acquired the 34.5 square kilometre project in June this year, which is located 120 kilometres south of Mongolia’s capital Ulaanbaatar.
Modun claimed the resource estimate is almost double its previous targets of 200Mt to 300Mt, adding the result has confirmed potential to develop the project into a large scale thermal coal mine.
“The JORC Reportable coal resource has confirmed our belief that we have a valuable asset to develop,” Modun Resources managing director Chris Mardon said in the company’s announcement to the Australian Securities Exchange.
“The close proximity to infrastructure and a major coal market adds to the potential for a large scale project.
“These results propel Modun to having one of the largest tonnage coal resources of the ASX-listed companies currently operating in Mongolia.
“Furthermore, we believe we have a substantial project on just 16 per cent of the licence area.
“We also see significant exploration upside – we are yet to unlock the full value of this licence.”
Nuurst project location. Source: Company announcement
According to the company rail infrastructure is located six kilometres from Nuurst providing a direct transport option to the Chinese border, which is 610km away.
Modun also said the project’s resource combined with its coal seam thickness should translate into a low stripping ratio, which lends itself to a large scale, low cost mining operation.
The fast timing of the resource discovery from the acquisition of the project six months ago has Modun planning to immediately commence a Scoping Study.
Modelling already carried out by the company has suggested the resource is open to the north and becomes shallower.
The company said it will be focusing on this area throughout its 2012 exploration program, which will target further coal seams.
In addition, the company will progress a mining licence application.