For economic and practical reasons, coal will be with us for the indefinite future

COAL: affordable, reliable and essential by Ellsworth Dickson

Trial mining and coal processing operations at the Fortune Minerals Mount Klappan Coal Project in northern British Columbia. Photo courtesy Fortune Minerals Ltd.

COAL HAS BEEN USED for cooking and over two centuries at our current rate of of the rank scale and is the most valuable. heating for over 4,000 years and still plays consumption. Anthracite is found almost exclusively in an indispensible role in many countries Coal is the altered remains of ancient veg- northern British Columbia and Yukon. where it is the only realistic fuel or energy etation that accumulated in peat bogs and While coal has been criticized from an option. This is because coal, the most swamps. Called the first coal age, the for- environmental standpoint, carbon capture abundant and economical fossil fuel on mation of coal began in the Carboniferous and storage may provide the potential to earth, is found in at least 70 countries. Coal Period 360-290 million years ago. Over the reduce carbon dioxide emissions from coal currently provides over 23% of global millions of years, the effects of pressure use to almost zero. Below are summaries of primary energy requirements. It gener- and temperature transformed this organic various coal projects. ates about 39% of the world’s electricity substance into the various grades of coal. and nearly 70% of global steel production The type or classification of coal is known CanAm Coal Corp. [COE-TSXV] is a coal depends on coal. Coal-fired plants are the as its rank, which depends on the degree producing and development company. most important sources of fossil-fuel gen- of change the peat underwent. Low rank CanAm has completed two acquisitions erated electricity in Canada. In addition, coals, such as lignite and sub-bituminous during the past year: gaining control of Canada exports over 28 million tonnes of coals are soft with a low energy content. RAC Mining LLC, a predominantly metal- coal annually to over 20 countries. Higher rank coals such as bituminous and lurgical coal producer, and acquiring a Worldwide, proven reserves of coal are anthracite contain more carbon and pro- 50% ownership stake in Birmingham Coal over 1 trillion tonnes – enough to last for duce more energy. Anthracite is at the top & Coke Inc., a predominantly thermal coal

50 www.resourceworld.com SEPTEMBER 2011 producer. The company now has an own- exploration leases located within the Hinton which hosts an indicated resource of 29.5 ership stake in four producing coal mines, region of Alberta. The company’s flagship million tons. The company also added 9.04 one development mine, permits and leases project is the Vista Coal Project which has million tons of indicated coal resources at covering about 5,000 acres, and over 110 the potential to be one of the largest export its Winner property. employees. Development assets include thermal coal mines in North America. The EastCoal Inc. [ECX-TSXV], through its exclusive rights to a proprietary coal-to- Vista Coal Project contains over 20 km of subsidiaries, Ukraine Energy and EastCoal liquids technology, which converts coal continuous, gently-dipping, strike length Company, owns the Verticalnaya Coal into liquid fuels; the Buick Coal Project and a measured and indicated resource base Mine located in southeast Ukraine which has significant coal resources. Operations of over 985 million tonnes of low sulphur, it plans to re-open on a significantly and assets are in Alabama and Colorado. high volatile bituminous, export quality expanded basis. Following the start of Cardero Resource Corp. [CDU-TSX] thermal coal. A recently completed pre-fea- de-watering the lower levels of the main has a 75% interest in the Carbon Creek sibility study defined an initial marketable Verticalnaya shaft mine, the company is Coal Project, an advanced-stage metal- reserve of over 260 million tonnes. now rehabilitating some 120 metres of lurgical coal development project in the Colonial Coal International Corp. previously flooded roadways. EastCoal is Peace River Coal Field, northeast British [CAD-TSXV] is a Vancouver, BC-based min- also planning to mine a bulk sample from Columbia. The project has NI 43-101 com- ing development company specializing in the H8 seam, to be carried out whenever pliant measured and indicated resources metallurgical coal. The company currently de-watering and rehabilitation permits. A of 114 million tonnes with an additional has 100% interests in two resource-stage 400 tonnes-per-hour barrel washer plant is 89 million tonnes inferred. This summer’s coal properties in the Peace River Coal being constructed in England for installa- drilling is designed to increase the mea- Field in northeast British Columbia. tion by the first quarter of 2012. This will sured component of the resource, leading Compliance Energy Corp. [CEC-TSXV] process the coal to be produced from the to a new resource estimate and preliminary has coal interests in British Columbia. H11 seam until a central processing plant, economic assessment in late 2011. Through the Comox Joint Venture, the com- servicing both the H11 and H8 seams is Cline Mining Corp. [CMK-TSX] recently pany owns 60% of the Raven Underground installed in 2014. shipped its first commercial sale of metal- Coal Project and is the manager and operator Fortune Minerals Ltd. [FT-TSXV] is lurgical grade coking coal from its coal of the joint venture. The semi-soft, cok- focused on the development of its Mount mine located near the town of Trinidad in ing coal resource is NI 43-101 compliant Klappen anthracite metallurgical coal southern Colorado. The coal was transferred and consists of 72 million tonnes of mea- project in northwest British Columbia to into rail cars from the company’s newly sured and indicated resources, as well as, production. The recently announced joint constructed bulk rail load-out facility at 59 million tonnes of inferred resources. The venture agreement between its wholly- Jansen Yard, near Trinidad. A coal market- Raven Project is 82 km from a deep water owned subsidiary, Fortune Coal Ltd., and ing program is in full effect to establish and ocean port, and is a near term producer POSCO Canada Ltd. and its wholly-owned settle long term customer relationships. favourably located near power and transpor- subsidiary, POSCO Klappan Coal Ltd., to Bulk samples of the product coal are being tation corridors. Compliance has received an advance the Mount Klappan coal project produced and distributed to the major exploration permit from the Government of to production, has now closed. POSCAN’s national and international steel industry BC’s Ministry of Energy and Mines for the parent company, POSCO is based in South participants. Cline also owns the Lossan its New Island Copper Project 10 km south- Korea and is one of the world’s premier Coal Mine Project in northeastern British west of Port Alice, BC. steel producers. Columbia. Lossan coal is metallurgical (steel Corsa Coal Corp. [CSO-TSXV] has com- Mount Klappan hosts 2.8 billion tonnes making) coal with two grades – coking and menced mining operations at its Casselman of high rank anthracite coal, making this pulverized coal injection. An independent underground mine in Pennsylvania, its first one of the largest undeveloped deposits NI 43-101 report shows an in-place raw coal underground operation. The Casselman of metallurgical coal in the world. About resource of 239.6 million tonnes. Lossan is Mine has an indicated resource of 16.3 $86 million was spent to develop this asset, near rail service to year round Ridley Island million tons of coal. The first truckloads including $65 million by Gulf Canada Pacific international tide-water coal terminal of coal from the mine have been shipped Resources before being taken over by at Prince Rupert, BC. to, and successfully processed at the com- ConocoPhillips. A positive definitive feasi- Coalspur Mines Ltd. [CPT-TSX; CPL- pany’s coal preparation plant in Somerset bility study has been completed, and over ASX] is a coal exploration and development County, Pennsylvania. Corsa recently 200,000 tonnes of coal was test mined from company with over 33,200 hectares of coal purchased the Alumbaugh coal property the Lost Fox and Hobbit Broatch deposits

SEPTEMBER 2011 www.resourceworld.com 51 for pilot plant processing and trial cargos Natal province of South Africa. mately 20 km north of the Baitag Chinese of 100,000 tonnes of finished coal prod- Goldsource Mines Inc. [GXS-TSXV; border and 3 km west of the Olonbulag ucts to customers in North America, Asia G5M-FWB] has discovered one of Canada’s coal deposits. In addition, Lucky Strike has and Europe. The project is in the environ- most promising new coal deposits in eastern planned a 1,500-metre, due diligence drill- mental assessment process to develop a 3 Saskatchewan and, to date, has outlined coal ing program on the CN coal properties in million tonne-per-year mine and process resources of more than 170 million tonnes of Mongolia with camp setup and mobiliza- plant and a new road to the highway and good quality, sub- bituminous thermal coal. tion of equipment under way since August the port of Stewart, BC. The summer drill program, at its 100%- 10. Lucky Strike signed definitive agree- EmberClear Corp. [EMB-TSXV], in owned Border Project near Hudson Bay, ments to acquire an 80% interest in the CN addition to acquiring coal projects, is also Saskatchewan is designed to test several coal properties, subject to the completion developing the Good Spring Integrated geophysical anomalies for potential expan- of legal and technical due diligence and Gasification Combined Cycle (IGCC) facilities sion of coal resources. A second phase will regulatory approval. which convert coal to liquid energy sources collect a bulk coal sample for test work with Mercury Capital Ltd. [MLC.P-TSXV] that can be used for electricity generation. respect to coal-to-liquids, gasification, power signed an agreement June 30, 2011 The company recently acquired 185 acres of plant application and upgrading of the coal to merge with Canada Coal Inc. It is surface and coal mineral rights in northeast for transport and will likely be carried out expected the issuer, resulting from the Pennsylvania, where a drilling program is after freeze-up once the scope of test work merger, will be known as Canada Coal Inc. planned. Drilling is already under way at for the Zero Emission Energy Plants Ltd. or such other similar name, subject to reg- the nearby Tracy Slope Coal Mine. (ZEEP) technology is determined. ulatory approval. Canada Coal’s business is Erdene Resource Development Corp. Goldsource Mines and (ZEEP) recently the acquisition, exploration and develop- [ERD-TSX] holds a 25% interest in the entered into a binding letter of intent for ment of coal properties in Nunavut. Donkin Coal Alliance (DCA) with part- a business combination whereby the two Through subsidiaries, it holds 2,439,438 ner Xstrata Coal Canada, which holds a companies would merge. acres comprising 74 coal licenses and 75% interest. The DCA continues to work ZEEP is a private Bermuda company at or coal license applications located on towards the development of the Donkin arm’s length to Goldsource with world- Ellesmere Island and Axel Hieberg Island. Coal Project, Cape Breton, Nova Scotia, wide rights to a leading and state of the art MetroCoal Limited [MTE-ASX] is an specifically the Harbour seam, which con- gasification technology developed by the Australian-based emerging coal-based tains an indicated resource of 101 million Pratt & Whitney Rocketdyne division of energy company focused on its coal proj- tonnes and an inferred resource of 115 United Technologies Inc. The technology is ects in the Surat Basin in South East million tonnes classified as high volatile able to convert heavy hydrocarbons, such Queensland. The company’s vision is to A bituminous, high-sulphur, medium-ash as the Goldsource coal, into clean trans- build a substantial cleaner energy and coal with excellent coking coal proper- portation fuels and chemicals while largely coal business based on export thermal coal ties including low phosphorous, high eliminating pollutants. from underground mining and where pos- CSN (crucible swell number) and fluidity. Grand Cache Coal Corp. [GCE-TSX] is sible, open cut mining; and underground Under the revised development plan, the an Alberta-based metallurgical coal mining coal gasification with an integrated gas Donkin Coal Project is projected to pro- company that produces metallurgical coal synthesis process producing high qual- duce about 2.75 million tonnes per year for the steel industry. The company holds ity, clean liquid fuel (e.g. clean diesel and of washed export-grade coking coal at full coal leases covering over 22,000 hectares jet fuel), chemicals and fertilizers and syn- production. containing over 235 million tonnes of coal gas-fuelled power generation. MetroCoal Forbes & Manhattan Coal Corp. [FMC- resources in the Smoky River Coalfield in holds extensive coal exploration tene- TSX, JSE] has a 53.5% interest in Slater west-central Alberta. Grande Cache Coal ments in the Surat Coal Basin covering Coal (Pty) Ltd., a South African company has been producing coal on the property some 4,000 km2. which has a 70% interest in Zinoju Coal since 2004 and utilizes both surface and North American Gem Inc. [NAG-TSXV] (Pty) Ltd. Zinoju holds a 100% interest in underground mining techniques that is a coal producing company with mining the Magdalena bituminous mine and the produce a premium, low volatile, metallur- operations in Kentucky. With one mine Aviemore anthracite mine. gical coal. currently in operation, the company is The operating Magdalena bituminous, Kent Exploration Inc. [KEX-TSXV] See working towards starting production at and the Aviemore anthracite mines have article on page 44. its next mine on the Swan Pond property, a measured and indicated resource base Lucky Strike Resources Ltd. [LKY-TSXV] which is now fully-permitted and contains of 54.2 million tonnes of bituminous coal. has signed a letter of agreement to explore Jellico and Blue Gem Coal. North American The projects are located in the Klipriver the NKAK coal properties covering 8,736 Gem has been acquiring leases and permits coalfield, near Dundee, in the KwaZulu hectares in southwest Mongolia, approxi- in Kentucky to allow for future growth.

52 www.resourceworld.com SEPTEMBER 2011 With additional properties leased and the production company that, in November was the first public company, after permit for Granny Rose awaiting approval, 2010, saw its first coal project, Ulaan Goldsource Mines, to be involved in the the company is poised to continue its Ovoo, commissioned for production. staking rush following the discovery of expansion as a key player in the Kentucky The company controls over 1.4 billion significant coal in drill core near Hudson coal market. tonnes of open-pittable thermal coal in Bay, Saskatchewan. During the later part Novadx Ventures Corp. [NDX-TSXV; Mongolia (839 Mt measured, 579 Mt indi- of April 2008, Wescan applied for an NDXFF-PS] acquires and develops com- cated) between two distinct deposits with extensive package of coal dispositions panies with active or near-production, power plant plans for its second deposit covering over 250,000 hectares adjacent to high-quality, coal reserves, in the US (Chandgana) well under way. and partially surrounding the Goldsource Appalachia coal region. Through its wholly Saturn Minerals Inc. [SMI-TSXV] has coal discovery. owned subsidiary, MCoal Corporation, made two coal discoveries on its Saskatoba 49 North Resources Inc. [FNR-TSXV] Novadx operates the Rosa Mine in Blount Project since 2010, including one of the invests in other resource companies, County, Alabama. The Rosa Mine produces thickest coal seam intersections ever including Westcore Energy Ltd. [WTR- a high quality coal for the metallurgical encountered in Canada of 88 metres. The TSXV], as to 7,865,000 shares. Westcore and activated carbon coal markets. The company is also actively exploring for oil has an interest in over 95,000 hectares company is also developing the Rex No. and gas in eastern Saskatchewan after iden- in eastern Saskatchewan and western 1 Mine in Cambell County, Tennessee. tifying hydrocarbons in drill core during Manitoba adjacent to the north, south, MCoal expects to begin operating this coal exploration in 2010. Saturn owns over and east side of the claim block hosting the mine in Q3 2011. The Rex No. 1 Mine will 1,240 km2 of coal rights and 1,524 km2 of oil Goldsource coal discovery. n produce a high quality coal for the metal- & gas rights in eastern Saskatchewan and lurgical, silicon metal and industrial stoker western Manitoba. coal markets. Novadx is completing the Teck Resources Ltd. [TCK.B-TSX, NYSE] acquisition of the Flatwoods Mine in Clay is the world’s second largest exporter of sea- County, Kentucky. The Flatwoods Mine borne steel-making coal, with five mines in produces a high quality coal for the indus- British Columbia and one in Alberta. The trial stoker coal markets. company has a 100% interest in the Coal NuCoal Energy Corp. is a private com- Mountain, Cardinal River, Fording River pany founded in 2008. The company’s and Line Creek mines, and has a 95% part- purpose is to secure development rights nership interest in the Elkview Mine and an to a significant known coal resource in 80% joint venture interest in the Greenhills southern Saskatchewan. NuCoal is the Mine. Coal sales account for 59% of Teck’s largest coal landholder in the province total mineral sales. of Saskatchewan with a total of approxi- Thelon Capital Ltd. [THC-TSXV] aims mately 1.7 million hectares that host to become a million ton-per-year producer substantial lignite resources. of high quality thermal, metallurgical and Pacific Coal Resources Ltd. [PAK-TSXV] specialty coals in the Appalachian region is focused on coal, coking coal, asphalt and of the US by 2012. The company has pur- asphaltite exploration, development and chased Clear Fork Mining Co. in order to production from prospective producing, acquire the Jellico Coal Project in Cambell development-stage and exploration-stage and Claiborne counties, Tennessee. properties in Colombia, South America. Current production is 25,000 tons/month The company hzas acquired, or entered which is expected to double over the next into agreements to acquire, various inter- year. There are about 3 million tons of coal ests in several operating coal mines and under permit with an expected mine life projects representing a substantive coal and of eight years. Thelon has signed a second asphaltite exploration and production area lease agreement to mine a second 600-acre throughout Colombia. Producing coal mines section of the Jellico Project, which is set include La Caya, Cerro Largo and CI Jam. La to start production next year at an aver- Tigre is a development-stage project. age of 20,000 tons per month for up to 10 Prophecy Coal Corp. [PCY-TSXV; years. Other coal project acquisitions in PRPCF-OTCQX; 1P2-Frankfurt] is an Tennessee are also under way. internationally diversified thermal coal Wescan Goldfields Inc. [WGF-TSXV]

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