Goldsource pursues power plant, coal-to-liquids for Border coal reserve
snl.com
Canada's Goldsource Mines Inc. on July 15 reported the results of a 2009-2010 winter exploration program consisting of 27 core holes at its wholly owned Border coal project near Hudson Bay, Saskatchewan.
"Numerous intercepts of greater than 40 metres of coal were encountered with the coal in the Niska 107 deposit nearer to surface, generally showing lower ash content and higher calorific values than other deposits," Goldsource said in its report. "Minor coal seams were encountered in some of the remaining 14 holes, while others were drilled outside the periphery of the deposits."
To date, drilling has identified 17 coal deposits at Border, with the recent Fugro airborne gravity surveys indicating good potential for additional coal discoveries and the expansion of several existing deposits, Goldsource said.
Goldsource will incorporate data from the winter 2009–2010 drill program into an updated National Instrument 43-101 Technical Report, which will include an updated resource model and revised estimates. It is anticipated that much of the 89.6 million tonnes of inferred resources will be upgraded to the indicated resource category.
The company added: "The Preliminary Economic Assessment ('PEA') continues under the direction of Marston Consultants and EBA Engineering Consultants." Initial results from the PEA suggest that an on-site 500-MW clean coal-fired generator is the first choice for an end use of the coal. Recent power studies suggest that a 500-MW generator would help fulfill Saskatchewan's future power requirements, Goldsource noted. Additionally, abundant biomass resources are available in Saskatchewan as a supplement to coal in such a plant and could offset CO2 emissions for a reduced carbon footprint for the project.
A minemouth coal-to-liquids plant appears to be a second alternative. Goldsource said it has signed confidentiality agreements with providers of that technology, which will be assessed as part of the PEA. Indications are that the technology can be economically competitive with the current price of oil. Based on conversion ratios of 1.5 to 3.0 barrels of oil equivalents per tonne of coal, there are an estimated 200 million to 400 million BOE contained in the Border Coal deposits, the company added.
A review of potential power generation partners is under way, the company said. In addition, the study will examine mining and capital costs, transportation and potential export markets. Goldsource anticipates completion of the PEA in the third quarter of this year.
"We believe that we have successfully achieved our main goal of converting the Inferred Resources in the Niska deposits to the higher category of Indicated Resources," Goldsource President J. Scott Drever stated. "In doing so, we will have exceeded the threshold target of 100 million tonnes of Indicated Resources necessary to support a potentially economic operation of significant size. The completion of the Marston Preliminary Economic Assessment later this year will provide guidance as to what options are available for development of the resources and how the significant value of these coal assets can be realized."
Goldsource Mines is a resource company engaged in the exploration and development of Canada's newest coalfield in east-central Saskatchewan. The company has aggressively drilled only a portion of the new thermal coalfield and has discovered 17 coal deposits of varying size, with coal zone thicknesses greater than 100 meters within the permit area of the Border coal project. |
