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Aspire Mining Limited (ASX: AKM), leading pure-play metallurgical coal developer, has released an update on the progress of the Ovoot Early Development Plan (OEDP), the first stage of its flagship Ovoot Coking Coal Project (100%-owned).
Special Purpose Road Progress
The OEDP includes an open pit development of the Ovoot Coking Coal Project and trucking up to 4 million tonnes per annum (Mtpa) of washed coking coal along a 560-kilometre special purpose road through to the nearest rail head at Erdenet. This road, as indicated, is expected to deliver two key benefits to the local communities along its path.
The first benefit being provision of a 200-km sealed road connection between the Mogoin Gol community (adjacent to Ovoot) and Murun, the capital of the Khuvsgul province. Secondly, the transportation of coal would be undertaken through the purpose-built road from Murun to Erdenet terminal to prevent truck traffic on the existing sealed road, which is presently dedicated to locals and tourist traffic.
Read: Progress On Rail And Road Links For Ovoot Early Development Plan
The OEDP Pre-Feasibility Study, which was released on 28 February 2019 and updated on 11 November 2019, outlined a construction cost estimate of USD 165 million for the road worlds which would make up 2/3rd of the total OEDP development capital cost of USD 259 million.
Read: Improved Financial Outcomes From updated OEDP PFS; Further Updates to the Re-Stated OEDP PFS Extended Case
In Parallel to the PFS, Aspire Mining had also started working on a Definitive Engineering Study during the three months to 31 March 2019 (March Quarter 2019). As the approvals concerning the preferred route were being sought from the 13 soums that fall along the planned road path, the field work was stalled meanwhile.
Approvals from soums in Bulgan and Orkhan were received. However, approvals from the 5 soums in the Khuvsgul airmag required the ultimate approval of Khuvsgul airmag government as these soums were impacted by the intended road alignment.
An airmag is a Mongolian word meaning “tribe” and an administrative subdivision within the country. Soum refers to a country subdivision in Mongolia.
The Khuvsgul airmag government had studied the road alignment between Mogoin Gol and Erdenet, which was subsequently included in airmag’s 2030 Road Development Plan (referring to the figure above). This approval marks a major green signal for Aspire Mining to engage with the community including each of the soums along the road path and subsequently obtain final approval from the Ministry for the alignment and completion of the Definitive Engineering Study.
Definitive Environmental Impact Assessment (DEIA)
Aspire Mining is also actively engaging with the local Tsetserleg soum Government and communities in the vicinity of the Ovoot Project, to gain the necessary approvals for the advancement of the OEDP Definitive Feasibility Study (DFS).
The approval being sought from the Ministry of Environment for the DEIA is a significant one. It has to include local stakeholder information sharing and engagement details, ethnological surveys, flora and fauna surveys, as well as social impact assessments. Besides, management and mitigation plans for the OEDP would also be provided by the company during the approval process.
At the same time, the DEIA will encompass and address all ten of the International Finance Corporation’s (IFC) “Equator Principles” for responsible and sustainable resource developments. This would demonstrate compliance to funding conditions of the international commercial and multi-lateral banks, thus, enhancing the significance of the project.
Aspire Mining is planning to complete the DEIA by June Quarter 2020.
Aspire continues to be a big supporter and contributor to local communities. Recently, the company provided 80 tonnes of feed for local herder communities at the request of the local government because the area was struck by heavy snowfalls this year, leading to significant livestock losses due to lack of feed.
The Company has finalised and released its Environment, Social and Governance Policy Statement, which can be found on the Company’s web site at www.aspiremininglimited.com.
Road Ahead
Presently, Aspire Mining’s focus remains on completing the OEDP DFS, subject to receiving key permits and approvals along with completing other technical studies for the DFS. Once approval for DEIA is obtained, the company will commence site works. For an eye over the company’s key activities undertaken during Calendar Year 2019, please READ.
Stock Information: With a market cap of ~ AUD 53.3 million and ~ 507.64 million shares outstanding, the AKM stock closed at AUD 0.100 with 117,090 shares traded on 19 February 2020.
