Recent History – 2001
Jan. 31, 2001
TUMBLER RIDGE — A scoping study has produced some encouraging results for the start-up of a small-scale coal mine in the Tumbler Ridge region.
The study, prepared by Norwest Mine Services Ltd., supports the potential for development of an underground mine on Western Coal Corporation’s (WCC) Wolverine property that would yield about one million tonnes of metallurgical coal each year.
The property is located about 23 km. west of Tumbler Ridge. The study is for the Perry Creek deposit, adjacent to the railway and one of several deposits on the property.
Western Coal Corp. made the announcement Monday.
Norwest evaluated two production levels — 670,000 tonnes per year and 1,007,000 tonnes per year — and found that the higher production level had the more favourable economics.
“A mine producing one million tonnes of saleable coal annually is generally considered to be the optimum size for a single underground mine in the Rocky Mountains,” said Norwest in the study. “Several mines of this size have operated successfully.”
Norwest estimates a total of 35.7 million tonnes of coal in the deposit, of which three million is indicated, 18.9 million tonnes is inferred, and 13.9 million tonnes is speculative.
The mine would last 13 years and, based on a price of $57.35 per tonne, it would produce a pre-tax internal rate of return of 22 per cent.
Norwest also said some work should be carried out in nearby areas, both those owned by WCC and by other companies. “Those deposits may add to the life of a mining operation developed in the Perry Creek area if future exploration and evaluation shows that their development would be economic,” Norwest said. “The potential may exist for a significantly larger operation to be developed in the Wolverine area with the Perry Creek operation forming the cornerstone of this complex.”
With the results in hand, Vancouver-based WCC said in the news release that it is having discussion with potential investors and participants with respect to financing or pursuing a joint venture for the next stages of exploration and feasibility work on the Perry Creek deposit and the Wolverine property.