05/05/2015 - 11:10

Atrum progresses Groundhog with finance deal

05/05/2015 - 11:10

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Subiaco-based Atrum Coal has signed a deal with a Chinese enterprise that will provide a $US100 million ($A127 million) facility and mining equipment to develop a section of its flagship Groundhog anthracite project in Canada.

Atrum progresses Groundhog with finance deal
Atrum Coal's flagship Groundhog anthracite project in Canada.

Subiaco-based Atrum Coal has signed a deal with a Chinese enterprise that will provide a $US100 million ($A127 million) facility and mining equipment to develop a section of its flagship Groundhog anthracite project in Canada.

Under the terms of the deal, China Coal Technology & Engineering Group Corp will supply and finance mining equipment to develop Atrum’s Groundhog North project, which is forecast to produce about 5.4 million tonnes of the coal product per annum.

It includes the supply of roadheaders, mobile diesel equipment, QDS attachments, conveyor systems, continuous miners, shuttle cars, mobile bolters, feeder breakers, auxiliary fans, a mini wall mining unit and the first stage of a modular coal handling and preparation plant, which will allow Atrum to complete an initial small scale mine and subsequent mini wall development at the project.

“Through this facility, we have the plant and equipment required to deliver the bulk sample mine, upgrade to a small scale mine and further ramp up and progress about 1.5 million tonnes per annum production of the full scale mine,” vice-president of operations Ben Smith said.

Atrum is also in negotiations with CCTEG for a further $US250 million facility to expand both the full-scale underground mine beyond 2017 production rates and finance further expansions of Groundhog North.

The company is expecting to receive a bulk sample mining licence for the first 100,000 tonnes at Groundhog North before June, which, combined with the facility package, will facilitate maiden shipments of anthracite to Asian export customers later in the year.

The company said it was in discussions with offtake partners from Japan and South Korea for a direct equity investment into Groundhog North.

Atrum has four years to repay the facility.

Atrum shares were 3.3 per cent higher to $1.23 a share at 11am.

 

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