Tigers Realm Coal Ltd (ASX:TIG) finished the June quarter as expected at its Amaam Coking Coal Project located within 35 kilometres of the Bering Sea coast in far eastern Russia.
Winter mining and transportation of coal to port ceased at the end of April as planned, and work on the first 2017 phase of haulage road construction commenced in May.
The road work is on schedule with mining and coal haulage planned to recommence in the second half of July.
Currently, 98,300 tonnes of thermal and semi-soft coking coal is stockpiled at the company-owned Beringovsky Port ready for sale and performance trials with major North Asian steel mills.
Sales contracts for the first cargos of thermal coal to China and the Chukotka market were completed.
Amaam Coking Coal Project
Two tenements, Amaam and Amaam North, together comprise the Amaam Coking Coal Project, located within 35 kilometres of the Bering Sea coast in Chukotka Autonomous Okrug, far eastern Russia.
Tigers Realm has 80% ownership of Amaam and most recently increased its ownership to 100% of Amaam North, which is where operations are underway at Project F.
The company also owns 100% of the Beringovsky Port and Coal Terminal.
Amaam and Amaam North have combined JORC compliant coal resources of 632 million tonnes with the majority of these resources being of coking coal quality.
Project F within Amaam North has 110.6 million tonnes of coal resources, 16.1 million tonnes of which have already been classified as Product (Marketable) Reserves under JORC.
Operations at Project F
Coal production commenced in December 2016 at Project F from where coal is trucked to the 100%-owned Beringovsky Port and Coal Terminal located circa 37 kilometres by road.
Phase One of Project F is in production and ramping up to 600,000 tonnes per annum with relatively low capital expenditure required to grow Project F to an interim 2+ million tonnes per annum capacity.
Project F has a low stripping ratio, short overland transport to port, and low third party charges due to ownership of the port.
Port fully operational
The company-owned port is now fully operational for export with all the required upgrades for the 2017 shipping season complete.
The first export cargo of 40,000 tonnes is now scheduled for shipment in mid-July.
Road construction update
The road works are divided into three areas, the completion of major stream crossings, the construction of road base and the placement of a gravel running surface.
At the end of the June quarter, across the 40 kilometre road length:
- All major stream crossings were completed;
- Road base was delivered and placed over 23.5 kilometre of the 27.5 kilometre of road which required additional road base (13 kilometres of the road base was completed in 2016); and
- Gravel top surface was delivered and placed over 20.5 km of the 33 km of road requiring gravel.
Analysis
Tigers Realm continues to advance its Project F coal operations into a sustainable project with a long mine life.
As the production rate increases during Phase One of Project F, site costs for mining and delivery of coal to port are forecast at circa US$22 per tonne at 600,000 tonnes per annum.
This means the operation has the potential to be one of the world’s lowest cost coking coal mines.
With current spot price levels of around US$145 per tonne for hard coking coal and around US$95 per tonne for semisoft, Project F will be a high margin coal mine.
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