www.unuudur.com » Aspire Mining closer to unlocking Ovoot riches with Government rail support

Aspire Mining closer to unlocking Ovoot riches with Government rail support

[Нийтэлсэн: 10:18 14.10.2014 ]


Aspire Mining (ASX:AKM) has received support from the Mongolian Government with its proposed Erdenet to Ovoot Railway included in its List of Approved Projects.

This 547 kilometre section of the Northern Rail Line connects the 100%-owned Ovoot Coking Coal Project to the Trans-Mongolian Railway and is key to its development.

The listing follows recent agreements between Russia, China and Mongolia to expand the Trans-Mongolian Railway to assist Mongolian exports and transit freight between Russia and China.

Inclusion of the US$1.3 billion rail line on the Concessions List is a major milestone for Aspire to securing the rail transport to deliver coking coal to international markets.

Under Mongolia’s Concession Law, a tender will be called for interested parties to bid for the concession right to build-operate-transfer.

Aspire said it encouraged other interested parties to participate and would welcome participation in a consortium approach.

“The inclusion in the official list of concessions for this important piece of infrastructure in Northern Mongolia unlocks the opportunity for the development of not only the Ovoot Project, but other resource projects in the area and to support agricultural expansion in the region,” managing director David Paull said.

Ovoot Coking Coal is capable of producing 188 million tonnes of saleable blending coking coal over a 21 year life with rail access.

Northern Railways

Northern Railways has been progressing the US$1.3 billion Erdenet to Ovoot railway development with several studies completed to date.

A pre-feasibility study was completed in April 2013, with an on-the-ground field study completed in September 2013 confirming the engineering and operational viability of the railway.

The rail line is designed for total capacity to carry 22 million tonnes per annum and will also carry passengers, general freight, agricultural products and bulk commodities.

Aspire has received several non-binding financing Expressions of Interest from a number of parties totalling US$1.3 billion.

Ovoot Coking Coal

The Ovoot Coking Coal Project in northwestern Mongolia has a JORC Resource of 255 million tonnes and is the country’s second largest coking coal reserve behind the government-owned Tavan Tolgoi project.

Initial production is estimated to commence in 2018, producing 5 million tonnes per annum of saleable coking coal and increasing in subsequent years to achieve full scale production of up to 10Mtpa from both the open pit and underground operations.

Capital costs to achieve initial production is estimated at US$144 million with operating costs of between US$76 and US$86 per tonnes Free-On Rail at the Chinese border for the first two years of operation, and between US$82 and US S$92/t over the first five years.

The project – along with the Tavan Tolgoi – has also been recognised as one of the key potential coal suppliers to Mongolia’s Sainshand Industrial Park.

Current offtake interest in Ovoot coking coal exceeds targeted production with MoUs signed for up to 7.4 million tonnes per annum, or 148% of planned initial production.

It has also signed a non-binding MoU to sell up to 250,000 tonnes of oxidised coal per annum to Zavkhan Power Station about 70 kilometres south of Ovoot.

This provides a potential revenue stream from a product that would otherwise have been considered a waste material.

The MoU includes the construction of transmission infrastructure that will allow the supply of 35 megawatts of power per year to Ovoot.


The inclusion of the Erdenet to Ovoot Railway on the Mongolian Government’s List of Approved Projects unlocks the opportunity for the development of the Ovoot Coking Coal Project.

It follows on recent rail and trade agreements that Mongolia has reached with Russia and China as well as the strong interest in Ovoot coking coal.

Aspire has also entered into an advisory mandate with corporate advisory firm and investment house Argonaut to progress the project.

Proactive Investors continues to maintain a 6 – 9 months share price target of $0.125 per share subject to the Northern Rail Line concession being granted for NRL.

Aspire had $3.5 million in cash as of 30 June 2014.


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