Aspire Mining (ASX:AKM) ends March quarter with major strides at Ovoot project

Highlights:

• Aspire Mining submitted the DEIA report for the Ovoot Coking Coal Project to the ministry for approval during the March quarter.
• Work on the Front End Engineering Design (FEED) study for the Coal Handling and Preparation Plant infrastructure is nearing completion.
• The quarter saw material completion of the FEED study on the Erdenet Rail Terminal infrastructure.
• AKM reported a cash balance of AU$30.6 million at March-end.

2021 saw strong demand for metallurgical coal, pushing the commodity prices to an all-time high. Since the beginning of 2022, prices of metallurgical or coking coal used for making steel have been riding high amid Russia-Ukraine war. The prices are estimated to remain high at around US$300/tonne for 2022.

Eyeing to tap the lucrative opportunities, Aspire Mining Limited (ASX:AKM) is positioning itself to be a significant metallurgical coal producer. The Company operates its flagship Ovoot Coking Coal Project in Mongolia, which is in close vicinity to China and Russia, two high demand markets.

Recently, the Company released its last quarter report, highlighting key developments for the period ended 31 March 2022.

Ovoot DFS a top priority

Aspire is currently undertaking a Definitive Feasibility Study (DFS) on the Ovoot Coking Coal Project (OCCP). To complete the study, the Company requires to drill additional infill holes in the vicinity of the starter pit location. For this, the regulatory norms require a Detailed Environmental Impact Assessment (DEIA) submission and approval by the Ministry of Nature, Environment and Tourism.

AKM has completed local community consultation, as well as submitted the report to the ministry. The Company expects to secure approvals in an upcoming review committee meeting.

FEED studies for CHPP and ERT pick up steam

During the reported period, Aspire continued to advance its Front End Engineering Design (FEED) studies on the Coal Handling and Preparation Plant (CHPP) and Erdenet Rail Terminal (ERT) infrastructure.

Sedgman Pty Ltd, which is finalising the CHPP FEED study, completed work on Stage 2 of the FEED study, including a preliminary design and cost estimate for the construction of a 350 tonne per hour CHPP.

Related read: Aspire Mining’s (ASX:AKM) Ovoot Project gathers steam with recent developments in Mongolia

O2 Mining, engaged by AKM for a FEED study on the ERT infrastructure for the OCCP, is working on Stage 2 of the study, which involves finalisation of designs and the development of cost estimates.

Road planning and design progressing well

Aspire’s local engineering consultants continued to progress the detailed design and feasibility study for the paved road, planned to be used for hauling washed product coal from the OCCP to the ERT. The work is progressing as per the compliance requirements of the Ministry of Road and Transport Development.

Related read: Aspire Mining positioned well amidst projections for all-time high coal demand

The Company also received laboratory results during the quarter from the survey work carried out in December last year.

The Feasibility Study is nearing completion, and the report will be submitted in the coming weeks for the review to the Science and Technology Council.

Significant ESG activities

During the quarter, Aspire pledged to plant 10 million trees in support of Mongolian President's 'One Billion Trees' campaign. To achieve its target, the Company would set up a seedling nursery in Murun, the capital of Khuvsgul aimag.

The Company is also engaged in a ‘Green Fodder Project’, helping local communities to feed their livestock during harsh winters. The scheme also generates temporary employment opportunities for the community.

The quarter saw completion of sales of remaining livestock feed from the 2021 'Green Fodder Project' trial. The Company plans to enable a similarly sized harvest in 2022.

Related read: Eye on ESG, Aspire Mining (ASX:AKM) vows to plant 10M trees in Mongolia

Image source: Company update, 30 November 2021

Strong financial position

At the end of 31 March 2022, Aspire reported AU$30.6 million in cash and term deposits. The Company continues to work with Argonaut PCF to develop a banking financial model and a comprehensive financing plan for its flagship project.

Related read: Aspire Mining Charts out Ovoot Development with sustainability commitments

AKM shares were trading at AU$0.1 midday on 5 May 2022 with a market cap of AU$50.76 million.