The time frame you have outlined is actually quite close, a good way to judge time frames for drilling is to look at the time between previous drilling releases. Trying to put an exact time frame is difficult due to many factors such as equipment avaiablity, performance, weather conditions, depth etc.
I contacted the company back on 22/06 in regards to a few concerns i had at the time. One of the issues I inquired about was the lack of drilling results to date. Part of the reply i received is below:
"We have been frustrated by equipment availability and performance and in the short term have to achieve a certain amount of in fill holes, water bores and geotech holes to confirm pit wall strength"
This suggested to me that they have had issues with the rigs and they do require a significant amount of drilling to complete the scoping study. It also suggested that they had not completed as much exploration drilling as the company expected due to these reasons. I believe we will see some results in the near future once the rigs are free to continue exploration drilling.
In regards to constraints on hauling, its not so much the restrictions of the actual road its self. The constraints are from the boarder crossings, these croossings are heavily congested as many companies transport there products over the boarder to china. Alot of companies in mongolia are opting for this early production strategy as the rail infastructure is not suffecient atm. The road that is being built is a sealed road and is being built by the government and is not a dedicated haulage road.
If AKM where to build there own road then they would be able to ramp up production. But AKM is intrested in developing its rail infastructure as the cost of transport is signifcantly reduced even with the large amount of capital required. Road hauling is not the most cost effective option and the company is hauling its product in order to get some early cash flow and also get its product out into the market place in order to secure contracts for when production ramps up into 2016.
The processing for coking coal depends on the intend product output. e.g what charateristics the customer wants as these percentages determine what use the coal will have and what industry will purchase it. In general it will go to the steel industry and some of AKM's coal does not require processing (washing) which means they can dig it straight out of the ground and ship the product. Most likely though they will use this percentage of the deposit to be blended with the washed coal to form a cheaper and better product that cuts processing costs down.
Hope this answers your questions, GL to all holders
GB
Email response from the company.
Dear GB
Little has changed with respect to Aspire and its Ovoot Coking Coal project over the last two months yet the share price has halved. We have always had good liquidity and we have outperformed strongly in the preceding 2 months so it is understandable that we would fall more than most bulk commodity development companies. Buyers can stand back and be offered stock given the current momentum without having to push the price up to gain volume. The fact remains that there is $0.5 - $1m of new investment being made into AKM each day.
We are sticking to our stated strategy.
Under the continuous disclosure regime we must disclose any new material information. You can take from that then that there are no new material exploration results that require announcement. We have been frustrated by equipment availability and performance and in the short term have to achieve a certain amount of in fill holes, water bores and geotech holes to confirm pit wall strength. We have hardly scratched the surface of our exploration areas so far.
Our news flow should pick up as we report on our DSO Project Scoping Study and completion of our washing yield results from the 2010 programme. Be assured that in the event that we have significant exploration results we will aggressively report them.
If you have any further queries, please do not hesitate to contact us further.
Kind Regards,
Naomi Dolmatoff
AKM Price at posting:
59.5¢ Sentiment: LT Buy Disclosure: Held
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