Bering Coal Basin, Far Eastern Russia

 

Amaam and Amaam North Coal Map

The Bering Coal Basin consists of two tenements: Amaam North and Amaam. These tenements are located in the Beringovsky Basin which is located in the Chukotka Autonomous Okrug (District) in far eastern Russia, approximately 230km south of the regional capital of Anadyr and the administrative centre of Ugolnye Kopi, and some 40km to the south of the existing coal mining operations of Nagornaya and its supporting town of Beringovsky. The Amaam North and Amaam deposits are located within separate structural blocks of the Bering Coal Basin. The Bering Coal Basin covers an area of approximately 7,500km2 and extends from north of Beringovsky (Nargornaya mine) to the southern coast line. The primary coal host sequence at Amaam North and Amaam is the Middle Chukchi Formation of Palaeogene Age.

 

Amaam North Tenement

The Amaam North tenement is located 30km to the north of the Amaam tenement. TIG currently holds an 80% interest in the Amaam North tenement.

 

The coal formation at Amaam North is synclinal in structure with longitudinal and cross cutting faults, moderate dips at the margins, flatter dips along the axis. TIG has estimated an Exploration Target of 55 to 490Mt and  has completed a  drilling program comprising 40 holes on 250mx250m spacing. This program delineated  an initial JORC  Resource, Deposit F, of 26.8Mt comprising: 7.2Mt Measured (coking); 4.6Mt Indicated (coking); 13.3Mt Inferred (coking); 1.8Mt Inferred (thermal). A PFS was completed in early September 2013 which demonstrated Project F has very attractive economics as an early starter, low capex, low opex project for TIG. Key metrics of the PFS for Project F include: 1Mtpa of saleable product coal through the existing coal terminal at Beringovsky port only 35km trucking distance away; production  from H2 2015, shipping from 2016; low total cash costs of US$75/t FOB including government royalties; NPV of US$177m and IRR of 37% over an 11 year mine life. Project F is only a very small part of the Amaam North tenement.

 

Amaam Tenement

Amaam consists of one 231km2 tenement (the Zapadny Lease). The project area is 30km from the Bering Sea coast. TIG currently holds an 80% interest in the Amaam Tenement. The Amaam tenement is a multi-seam, moderate dipping deposit within a synclinal basin. Coal is in the Middle Chukchi formation (see Amaam Project Plan below), and is divided into four main areas by north-west trending faults. To date, exploration activities have identified that the highest tonnages of coal are within Areas 3 and 4.

 

Preliminary analysis of material sourced from Area 3 of the Amaam deposit indicates that the raw coal is described as ASTM rank medium to high volatile coal with an average ash content of approximately 30%. Following a conventional wash process, Amaam coal is expected to exhibit excellent coking qualities with high CSN, high vitrinite and strong fluidity.

 

The Amaam tenement is located 30km from a potential deep water port site on the Bering Sea coast which will allow Amaam coals ready access to the seaborne coal trade and key Asian markets.

 

TIG has estimated an Inferred and Indicated Resource at Amaam of 464Mt plus additional exploration target of 120-205Mt. A Pre-feasibility Study was completed in March 2013 which demonstrated Amaam to be a robust project, with combined open pit and underground production of up to 6.5Mtpa, average total cash costs of US$98/t over a 20 year life, an NPV (10% real after tax) of US$885M and IRR of 19%.

 

Beringovsky Port and Coal Terminal

TIG owns 100% of the Beringovsky Port and Coal Terminal located 35km to the north east of the Amaam North deposit and the proposed Project F mine.

 

The port is presently fully operational and under the terms of the sales agreement, the port will continue to ship up to 70,000 tonnes of coal annually for the nearby Nagornaya mine and volumes of general cargo.

 

The Beringovsky Port has historically handled over 700,000 tonnes of coal per year from the Nagornaya mine and the port will be progressively refurbished and expanded over time to at least 1Mtpa capacity.

Geological Information

This website includes an exploration target. The exploration target is based on drilling and associated exploration studies undertaken so far. The potential quality of the exploration target is conceptual in nature, and there has been insufficient exploration to date to define a mineral resource within the meaning of the 2012 edition of the “Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves” (“JORC Code”). Furthermore, it is uncertain if further exploration at its exploration target will result in the determination of a mineral resource.The website refers to Inferred Resources. According to the commentary accompanying the JORC Code, “the Inferred category is intended to cover situations where a mineral concentration or occurrence has been identified and limited measurements and sampling completed, but where the data are insufficient to allow the geological and/or grade continuity to be confidently interpreted. Commonly, it would be reasonable to expect that the majority of Inferred Mineral Resources would upgrade to Indicated Mineral Resources with continued exploration. However, due to the uncertainty of Inferred Mineral Resources, it should not be assumed that such upgrading will always occur. Confidence in the estimate of Inferred Mineral Resources is usually not sufficient to allow the results of the application of technical and economic parameters to be used for detailed planning. For this reason, there is no direct link from an Inferred Resource to any category of Ore Reserves. Caution should be exercised if this category is considered in technical and economic studies”.

Competent Persons Statement

The information compiled in this website relating to Exploration Results or Mineral Resources at Amaam and Amaam North is based on information provided by TIG and compiled by Neil Biggs, who is a member of the Australasian Institute of Mining and Metallurgy and who is employed by Resolve Geo Pty Ltd. Neil has sufficient experience which is relevant to the style of mineralization and type of deposit under consideration and to the activity he is undertaking to qualify as a Competent Person as defined in the JORC Code. Neil Biggs consents to the inclusion in the announcement of the matters based on his information in the form and context which it appears.