Outstanding Result Now Sets the Scene for Further Development of the Mine Which Will Enhance the Company's Competitiveness in Both the Domestic and International Coal Markets
The directors of Sharyn Gol JSC (MSE: SHG MO) are pleased to announce the final results of the 2010 JORC Resource Estimate undertaken by independent geological consultants for the Sharyn Gol Mining Project.
HIGHLIGHTS
- JORC Compliant Coal Resource totaling 374 Mt reported.
- 190.5 Mt Measured, 84.4 Mt Indicated and 98.9 Mt Inferred JORC Categories.
- 337.6 Mt reported above 300 meters from surface signifies the continuation of open cut mining for decades to come.
- JORC resource estimate calculated from a significantly larger Non-JORC Coal Inventory.
- Adjacent exploration targets identified demonstrating potential for further large increases to the existing coal resource base.
- New Open cut area containing 220.3 Mt down to 300 meters identified adjacent to existing open pit.
- All resources reported are entirely contained within the company's 100% held mining lease.
- Coal Quality and Washability test work indicating strong potential to produce a high yield, low ash, moderate to low sulfur, and high calorific value thermal coal product suitable to export to international markets.
- Company has now engaged an independent international mining Consultancy group to undertake a study into the near term upgrade and expansion of the operations.
JORC Resource Program Details
Between May and November 2010 the company engaged the professional management services of Triton Coal Pte. Ltd. to assist in the design and implementation of a 17,000 meter drilling program over the Sharyn Gol mining lease under the guidance of international resource consultancy firm Micromine.
The drilling program focusing on two areas within the mining lease named the "South West Area" and the "Satellite Area" was completed in late October 2010. 3-Dimensional wireframe modeling was undertaken following detailed seam correlation work and coal quality analysis.
JORC compliant coal resources for UNWASHED RAW COAL on an "Air Dry" basis for the two areas have been reported as totaling 373.8 Mt, Relative Density 1.54-1.71 g/cc, Ash 22.97-38.69%, Calorific Value 4,128-5,083 Kcal/kg, Internal Moisture 2.21-2.9%, Volatile Matter 26.66-33.30%, Sulfur 0.89-3.12% (average < 1%) content, Fixed Carbon 31.81-41.52%.
JORC compliant coal resources for UNWASHED RAW COAL on an "As Received" basis for the two areas have been reported as totaling 371.9 Mt, Relative Density 1.46-1.66 g/cc, Ash 20.99-37.68%, Calorific Value 3,783-4,524 Kcal/kg, Total Moisture 9.64-14.67%, Volatile Matter 24.59-29.8%, Sulfur 0.8-2.79% (average < 1%) content, Fixed Carbon 29.0-37.12%.
The Sharyn Gol Coal Resources have been classified and reported in accordance with the 2004 Australasian Joint Ore Reserves Committee (JORC) Code for the reporting of Exploration Results, Mineral Resources and Ore Reserves (the JORC Code).
Further Significant Exploration Upside Identified Capable of Substantially Adding Additional Coal to Current Resources
Also to note
- All Coal inventories identified above the Base Line of Weathering have not been included in this resource estimate.
- The JORC resource estimate has been calculated from a larger non-JORC coal inventory of 437 Mt.
- Remaining coal reserves and resources in the open cut have been excluded from the estimate.
- A corridor containing significant coal inventory has also been excluded from the estimate.
- Target areas for additional resources have been identified: within the existing open cut, within the corridor, within the still open southern and northern extensions of the Satellite Area.
Coal Quality Test Work Demonstrates Potential to Derive a Competitive High Quality, Low Ash, and Low Sulfur Product for Export Markets
Coal Quality and Washability test work on 51 composite samples in the South West Area and 61 composite samples in the Satellite Area at a density of 1.6 has demonstrated good yields for a high quality thermal coal fraction.
Laboratory test work undertaken to date has demonstrated a 66-70% yield to produce an 11-14% ash thermal coal product with low-moderate sulfur levels and an estimated calorific value of 6,025 to 6,076 Kcal/kg.
In the South West Area the average yield for a 12% ash product with an estimated calorific value of 6,200 Kcal/kg was reported at 86%. In the Satellite Area the average yield for an 8.6% ash product with an estimated calorific value of 6,200 Kcal/kg is almost 90%.
These very encouraging results indicate the operations strong potential through establishing simple washing process, to produce a premium high quality, low ash, and low-moderate sulfur coal product suitable for export to international markets.
Sharyn Gol Mine Location
Sharyn Gol JSC owns 100% of the Sharyn Gol mining lease and is owner operator to its operations located 215 km north of the Mongolian capital city of Ulaanbaatar.
The operations are strategically located on a 65 km long dedicated rail spur, which was built specifically to service the mining operation. The rail spur, considered by the company as a competitive advantage over its peers in Mongolia provides direct access to the Trans-Mongolian Railroad, which is connected, to China and Russia.
The company currently mines approximately 50,000 tons of coal per month, which is largely sold into the domestic regional market.
The company has now engaged a reputable international mining engineering consultancy to look into the expansion and redevelopment of the existing operation to allow both a substantial increase in production and quality control.
Chairman's Comment
Mr. B. Batmunkh, Chairman of Sharyn Gol JSC commenting on the results of the JORC program said, "This is an outstanding outcome for Sharyn Gol and long a waited since the company's privatization in 2003. The much larger than expected resource estimate reflects the diligence and professionalism of Triton Coal management team and our thanks go out to them. We would also like to thank Firebird Mongolia Fund, Ltd., Firebird Global Master Fund, Ltd., and Firebird Global Master Fund II, Ltd., our largest shareholders and the financial sponsors of the JORC drilling program, we could not have completed the project without their financial support and the day-to-day guidance and expertise we received from both James Passin and Anthony Milewski.
The results provide Sharyn Gol with a firm, solid, internationally recognized resource base from which we can now look to upgrade and expand our operations and for the first time, with confidence, work towards establishing quality coal products which will be able to competitively compete in the international coal sales arena."
Information Contacts
Sharyn Gol JSC
Investors:
amilewski@sharyngol.com
Website: www.sharyngol.com