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Inside Aspire Mining’s (ASX:AKM) March quarter plans for Ovoot project

Image Source: AKM Website

Highlights

  • Aspire’s exploration and development initiatives have been focused on developing its Ovoot Coking Coal Project (OCCP) in Mongolia.
  • Coking coal is witnessing strong import potential on the back of China’s demand for steel commodities to support its production.
  • The Detailed Environmental Impact Assessment (DEIA) for the Ovoot Coal Mine has been well received.

The year 2021 was quite eventful for Aspire Mining Limited (ASX:AKM), a mineral resource company focused on developing metallurgical coal assets in Mongolia. The Company’s exploration and development initiatives have been further driven by the strong import potential of coking coal as China doubles down its quest for steel commodities like coking coal to support its production.

ALSO READ: A Flick through Aspire Mining’s FY21 Performance

Over the last decade, China’s demand for raw materials and resources has grown substantially, especially for iron ore and coking coal. Moreover, global economic recovery from COVID-19 is anticipated to drive up steel demand over the short-to-medium term, thereby supporting coking coal prices. In the current scenario, Aspire Mining continues to position itself well for a critical role vis-à-vis China’s demand for coking coal.

Let us look at the recent activities and developments expected by the Company in the near future.

ALSO READ: Aspire Mining (ASX: AKM) fastracks Ovoot project development amidst buoyant coal market

Strong support for Ovoot Coal Mine DEIA

During the December 2021 quarter, Aspire’s engineering consultants advanced the feasibility study. The Detailed Environmental Impact Assessment (DEIA) for the Ovoot Coal Mine has been well received, garnering support by a significant majority of the local community.

The DEIA report, which included minutes of the community meeting, was lodged with the Ministry of Nature, Environment and Tourism for assessment, with approval anticipated in the March 2022 quarter.

Based upon the information collected, the Ovoot Coking Coal Project (OCCP) Feasibility Study is likely to be submitted to the Ministry of Roads and Transportation (MRT) within the March 2022 quarter.

The detailed design work for the road to be used for hauling coal from the OCCP to the Erdernet Rail Terminal (ERT) is underway, with submission to the MRT pending approval of the Feasibility Study and further refinement required. The detailed design is expected to be lodged early in the quarter ending 30 June 2022.

ALSO READ: Aspire Mining Charts out Ovoot Development with sustainability commitments

FEED study on OCCP Coal Handling and Preparation infrastructure

Aspire engaged Sedgman Pty Ltd to undertake the FEED (Front End Engineering Design study) study on the OCCP Coal Handling and Preparation Plant (CHPP) infrastructure. The December quarter saw Sedgman make significant progress on Stage 2 of the FEED Study, resulting in the preparation of bespoke designs and engineering drawings for the complete infrastructure.

Source: AKM Update, dated 28 January 2022

These drawings have helped in preparing the resultant bill of materials, which is now being used as basis for preparing updated CAPEX estimates. Furthermore, requests for pricing have been provided to vendors to obtain accurate costs. Stage 2 FEED Study, including the finalisation of CAPEX and OPEX estimates, is expected to wrap up within the March 2022 quarter.

ALSO READ: Aspire Mining positioned well amidst projections for all-time high coal demand

FEED study on ERT Infrastructure

The second phase of the study on the Erdenet Rail Terminal (ERT) Infrastructure is scheduled to be finalised within the quarter ending 31 March 2022. The ERT will be capable of loading both traditional open top rail wagons as well as shipping containers atop flat top wagons (which is now increasingly favoured) for more efficient transport in the Chinese marketplace.

The FEED study on the Erdenet Rail Terminal (ERT) Infrastructure including for truck unloading, coal storage and train loadout out infrastructure is being undertaken by O2 Mining Limited.

O2 Mining has advanced the Phase 2 of the study, which has involved the preparation of engineering drawings in support of the optimised processes and site layout determined in Phase 1.

ALSO READ: Aspire Mining reports significant progress at Ovoot Project in December quarter

A banking model has been developed by Argonaut PCF using the detailed first principles mine physicals and cost model. As work from various engineering studies becomes available over the March 2022 quarter, the banking model can be flexibly updated with revised mine plans and new capital and operating cost assumptions. The Company aims to present a funding plan to the Board in the June 2022 quarter.

AKM shares were trading at AU$0.084 apiece midday on 3 March 2022. The Company has a market capitalisation of AU$41.62 million.


 


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