Atrum Coal Limited (ASX: ATU) surged on ASX after the company announced 170% increase in the coking coal resource estimate for the Elan South deposit located within its wholly owned Elan Coking Coal Project in southwest Alberta, Canada. Now, Elan South JORC resource estimate has increased to 97 Mt, up from previous 2017’s estimate of 36 Mt.
The news immediately charged the bull market which took the Atrum stock up by 11.11% in the early trade today. At the time of writing, ATU is trading at $0.100 (8 January 2019; 12:25 PM AEST).
As per the company’s market release, the updated resource estimate is underpinned by the 2018 exploration program, consisting of 37 boreholes completed in three phases of drilling. Current JORC resource estimate outlines 31 Mt of Indicated Resource and 66 Mt of Inferred Resources, totaling 97 Mt.
Atrum’s Non-Executive Chairman Charles Blixt stated that an updated JORC resource of combined 97 Mt of Indicated and Inferred resources had validated the company’s belief that Elan South holds substantial hard coking coal resources. Mr. Blixt added the company is also encouraged by the initial results from the coal quality test work program that have confirmed high yield, hard coking coal, low ash, and low Sulphur.
Coupled with the Environmental Baseline Study started in June 2018, the updated resource and coal test work results represent a substantial advancement of the high-quality Elan South hard coking coal deposit towards targeted development.
During the 2018 Exploration Program at Elan South, Atrum completed the detailed surface mapping for coal outcrops and geology features along with logging reverse circulation boreholes, percussion or ‘rotary air blast’ boreholes among other works. All these geophysical logging work have equipped the company to better know the geological interpretation of coal seam intervals as well as the deviation in boreholes.
On the central-western side of the ridgeline, the coal seams are inclined westward on the up-thrust zone of the major thrust fault. On the eastern side of the ridge, exploration drilling and surface mapping have identified that the seams are again uplifted toward the surface through the nose of an anticline structure, known as the Fish Hook Anticline.
Detailed coal quality, washability and carbonization test work on Elan South samples is currently underway. The company expects to release the final results of this test work in the next several weeks which could add further significance to the initial results.
Moreover, Atrum plans to undertake an expanded drilling program at Elan South in 2019. This is set to target further JORC resource increases and upgrade the current resource classification. The company also confirmed to provide the updated JORC resource estimates for other areas within the Elan Coking Coal Project by the expected term of late January 2019.
Over the past 12 months, ATU has fallen by 43.89% including a negative price change of 10% in the past three months to 8 January 2019.
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