Aspire cuts mining cost estimates at Ovoot
Mining cost estimates for Aspire Mining’s Ovoot metallurgical coal project in Mongolia have been cut by 22% following a high-level review of the project to take into account current market conditions.
“The Ovoot cost estimates were initially completed for the 2012 Revised Pre-Feasibility Study when all cost inputs were derived during boom conditions,” the company said in its 4Q15 report.“The review was conducted to reflect the current market costs, which, over the last three years have seen significant cost deflation as a result of a number of factors including foreign exchange movements, labour rates and other input costs.”
The 22% decrease in mining costs confirms the expectation that Ovoot remains at the lower end of the global metallurgical coal cost curve on a FOR China basis, the company said.
The company also received the results of a geophysical survey conducted over the Ovoot tenements and surrounding areas by local Mongolian firm, AMO-Discover LLC. The survey identified two regions of interest that have been recommended for further surveying and drilling to the southwest and within existing exploration licenses.
“The results of the geophysical report are positive and confirm the substantial potential to increase the existing coal resources and reserves at Ovoot,” the company said.
The survey also identified areas of limited further exploration potential and the company is now in the process of relinquishing 17 000 ha. of tenement area, reducing its tenement position to about 25 000 ha.
Aspire Mining is the largest coal tenement holder in the Orkhon-Selenge Coal Basin in northern Mongolia. In addition to the Ovoot project, it also owns the Jilchigbulag Coal Project and Myngan Exploration Licence, as well as a 50% stake in the Ekhgoviin Chuluu Joint Venture, which owns the Nuurstei and Erdenebulag Coal Projects.
Through its Northern Railways subsidiary, the company is also developing rail infrastructure to connect its mining project to Mongolia’s existing rail network as part of a planned international trade corridor between Russia, Mongolia and China.
Edited by Jonathan Rowland.