Aspire Mining (ASX:AKM) and Noble Group are starting an initial 20 hole drilling program at the Nuurstei Coal Project in northern Mongolia that will provide near term price catalysts.
Results will be used to prepare a Pre-Feasibility Study for a small scale operation given its near-surface coking coal and proximity to road infrastructure.
This will in turn allow for the grant of a mining licence and completion of a general environmental impact assessment. Offtake agreements and mining could potentially follow.
Drilling will begin in August and is expected to be completed by the end of September, with laboratory analysis expected to be received in the December quarter.
Aspire had in June acquired a 50% interest in the Ekhgoviin Chuluu Joint Venture from Xanadu Mines (ASX:XAM).
ECJV is an equal joint venture with Noble and currently holds a 60% interest in the Nuurstei Project, which could be increased to 90% upon achievement of certain development milestones.
The 20 hole drilling program with a budget of US$500,000 will target the northern part of the Nuurstei tenement area and will consist initially of 20 holes at an average 100 metre depth.
This program is designed to confirm resource continuity to enable preliminary economic assessment, as well as provide samples for testwork.
Nuurstei is located about 10 kilometres to the southwest of Moron, the capital of the Khuvsgul province in northern Mongolia.
A paved road is currently being constructed between Moron and the town of Erdenet, where existing rail infrastructure terminates. Sealing of this road commenced in 2012 and is due to be completed at the end of 2015.
Coal produced at the Nuurstei Project could be transported along this road to Erdenet where product could then be loaded onto trains and delivered to customers.
Land purchased at Erdenet by Aspire in 2012 could be used as a coal stockpile and train load-out area.
It was acquired by the ECJV in mid-2011 and immediately had drilling success from an initial 11 hole program.
Subsequent test work has shown that the Nuurstei Project contains a low volatile bitumous coal with moderate to high ash levels and low sulphur.
Washed coal has high indicative coking properties though further testwork is required.
Nuurstei is also located within a relatively short trucking distance to the proposed Northern Rail Line being developed by Aspire’s subsidiary, Northern Railways LLC.
Preliminary indications are that coal from Nuurstei could be a useful blending partner for Aspire’s wholly owned Ovoot Project coking coal, and there would be a number of other operational and marketing synergies between the two operations.
There are near term price catalysts ahead for Aspire Mining with the initial 20 hole drilling program at the Nuurstei Coal Project and then results.
This could lead to a Pre-Feasibility Study and has the potential to become a small scale near-term coal producer for the company.
Achieving this will be a game changer for Aspire while it continues to progress its Ovoot Coking Coal Project.
Proactive Investors continues to maintain a price target of $0.125 within 6-9 months for Aspire.
Source: Proactive Investors