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Chandgana Coal Project
The Chandgana Coal Project is located in Khentii Aimag in eastern Mongolia and is contiguous to the planned Chandgana Power Plant.
The project is within the Nyalga Coal Basin and consists of exploration and mining licenses which host a measured resource of 633 million tonnes and an indicated resource of 539 million tonnes of thermal coal (total over 1.17 billion tonnes). The licenses are held by Chandgana Coal LLC (CC) a wholly owned subsidiary of Prophecy Coal Corp. All the licenses have very favorable geological characteristics including thick coal seams, thin overburden, few discontinuities, and good coal quality. These make for low cost-high productivity mining (average strip ratio is 2:1) of the resource and a coal well-suited for coal-fired thermal power plants.
During May 2013, Chandgana Coal executed a 25 year Coal Supply Agreement (CSA) with Prophecy Power Generation LLC (PPG, a wholly owned subsidiary of Prophecy) which is developing the 600MW Chandgana Power Plant project. As per the CSA, Chandgana Coal will supply 3.6 million tonnes of coal annually, at a price of USD17.70 per tonne with normal adjustments for a period of 25 years. PPG has committed to purchase a minimum of 2 million tonnes on a “take or pay” basis, with customary breakup fees payable by PPG. The initial coal delivery date is anticipated to be during the second half of 2016, subject to PPG signing a Power Purchase Agreement with the Mongolian Government, obtaining all necessary governmental approvals, and obtaining project financing.
The coal for the Chandgana Power Plant project will be supplied from the Chandgana Tal mining licenses. The Chandgana Tal mining licenses contain an estimated 124 million tonnes of coal resources, all in the measured category. The average in-place as-received basis gross calorific value is 3,306 kcal/kg.. The mine will be a surface (open pit) mine and will be located approximately 2 km from the proposed power plant site. The average waste to coal strip ratio is estimated to be 0.70:1 over the life of the mine. Should additional capacity be added to the power plant the coal resources of the Khavtgai Uul property would be mined.
Chandgana Coal Project Highlights
• Large coal resource including 633 Mt measured and 539 Mt indicated.
• Thick coal seams with thickness ranging from of 30 to 60 meters.
• Coal seams are shallow with depth ranging from 0 to 267 meters.
• Coal is moderate rank and grade with medium ash and calorific value and low total sulphur.
• Coal quality is well-suited to fuel the 600MW mine mouth power plant.
• Low weighted average strip ratio of 2.0:1.
• Resources are amenable to simple truck-shovel surface mining methods.
• Close proximity to infrastructure including 150 km from existing rail and 45 km north of the proposed Choibalsan Mongolian Railway extension, maximum 16 km from paved highway, electrical power will be supplied from the adjacent proposed Chandgana Power Plant, and existing cellular communications.
Chandgana Coal Resources
The Nyalga Coal Basin contains significant coal resources of good grade and quality. Prophecy Coal Corp. through its Mongolian subsidiary Chandgana Coal controls a major portion of the basin. Chandgana Coal’s resources are held in two properties – Chandgana Tal consisting of two mining licenses and Khavtgai Uul consisting of one exploration license.
Chandgana Coal Resource:
|Chandgana Coal Resources (Tonnes)|
|Chandgana Tal||Khavtgai Uul||Chandgana (Total)|
|Measured||0.124 Billion||0.509 Billion||0.633 Billion|
|Indicated||-||0.539 Billion||0.539 Billion|
|Total M&I||0.124 Billion||1.048 Billion||1.172 Billion|
Chandgana consists of two properties-Chandgana Tal and Khavtgai Uul. Chandgana Tal consists of 124.4 mt of measured resource. Khavtgai Uul consists of 509 mt measured and 539 mt indicated resource. Khavtga Uul’s resource estimates are based on the September 2010 NI 43-101 Khavtgai Uul Technical Report by Kravits Geological Services, LLC. The report is authored by Christopher M. Kravits CPG, LPG of Kravits Geological Services, LLC., who was an independent Qualified Person under NI 43-101 at the time of the report. The Chandgana Tal resource estimate is based on the November 2012 NI 43-101Updated Technical Report and PEA on Chandgana Tal by John T. Boyd Co. (USA). The lead Qualified Person for the report is Thaddeus J. Sobek, who is an independent Qualified Person under NI 43-101. Detailed Resource/Grade Table
Chandgana Tal consists of 0.124 Bt of measured resource. Khavtgai Uul consists of 0.509 Bt of measured and 0.539 Bt of indicated coal resources. The resource estimates for both properties meet the requirements of Canadian National Instrument 43-101 and were prepared by independent Qualified Persons.
The coal of both Chandgana properties has been sampled and assayed in detail. The coal is of sub-bituminous C to B rank (ASTM) and moderate grade with medium ash and gross calorific value and low total sulfur so is well suited for use in coal-fired thermal power plants such as that planned at Chandgana. The average in-place coal quality (as-received basis) for the major coal seam at Chandgana Tal is: total moisture 40.9 wt %, ash 10.8 wt %, gross heating value 3,306 kcal/kg, and total sulfur 0.61 wt %. The average in-place coal quality (as-received basis) for the Khavtgai Uul property is slightly better: total moisture 36.5 wt %, ash 10.1 wt %, gross heating value 3,636 kcal/kg, and total sulfur 0.59 wt %.
|Chandgana Coal Quality|
|Chandgana Tal||Khavtgai Uul|
|Total Moisture (wt%)||40.9 (arb)||36.5 (arb)|
|Ash (wt%)||10.8 (adb)||10.1 (arb)|
|Heating Value (kcal/kg)||3,306 (adb)||3,636 (arb)|
|Total Sulfur (wt%)||0.61 (adb)||0.59 (arb)|
The Chandgana Tal resource estimate is based on the November 2012 NI 43-101Updated Technical Report and PEA on Chandgana Tal by John T. Boyd Co. (USA). The lead Qualified Person for the report is Thaddeus J. Sobek, who is an independent Qualified Person under NI 43-101. The Khavtgai Uul resource estimate is based on the September 2010 NI 43-101 Updated Chandgana Khavtgai Technical Report by Kravits Geological Services, LLC. This is an update of the report prepared in 2008. The reports were authored by Christopher M. Kravits CPG, LPG of Kravits Geological Services, LLC., who was an independent Qualified Person under NI
- Nov 2012, 43-101 Updated Technical Report and PEA On Chandgana Tal (File size: 3.0mb)
- Sep 2010, 43-101 Updated Technical Report On Chandgana Khavtgai (File size: 13.0mb)
- Jan 2008, 43-101 Technical Report On Chandgana Khavtgai (File size: 10.0mb)
- Sep 2007, 43-101 Technical Report On Chandgana Tal (File size: 11.0mb)