Mine Background =============== The mine, located in the east of Colombia, is an established hard coking coal producer with a workforce of more than 140 employees. Current underground production and access is through a series of declines to mine 2 seams with a total economic thickness of 1.7m. Mining is by a modified room and pillar mining method and given the high quality nature of the coal, no wash plant is currently required. Sales of hard coking coal are made at mine gate with current margins of approx. 75%. Sales directly to the export market are planned in 2013. The mine has a current mine plan in excess of 50 years, although currently has no JORC compliant reserves or resources.
An independent technical review in 2010 determined that mine production can be increased significantly from its current levels through the introduction of mechanisation, improvements to the mine infrastructure, a modified mine layout and an additional production shift. Based on historic reports and its current due diligence, the Company believes annual production of 500,000t can be achieved in the medium term.
The coal is considered a very high quality, high volatile metallurgical coking coal. The following table lists the analytical results obtained from an independent analysis completed in 2010.
