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Blackham Resources Limited (ASX:BLK) Announce Results of Scaddan Coal to Liquid Plant Preliminary Process Study
Blackham Resources Limited (ASX:BLK) Announce Results of Scaddan Coal to Liquid Plant Preliminary Process Study

Perth, Oct 10, 2011 AEST (ABN Newswire) - Australian resource company, Blackham Resources Limited (googlechartASX:BLK) is pleased to announce the results of its CTL Preliminary Process Study (PPS). The production yields confirm the results of the scoping study previously reported. The PPS report was prepared by a consultant after confirming mass energy balances and yields with the technology suppliers.

CTL Preliminary Process Study

Blackham has identified a list of six gasification technologies suitable for gasifying Scaddan lignite for the production of chemicals and fuels. As Blackham, the manager of the Scaddan CTL Project, believes the production of low temperature Fischer-Tropsch (LTFT) diesel and naphtha, via gasification, is an attractive option for value addition to the Scaddan lignite. Blackham commissioned a consultant to prepare this PPS Phase ll study.

The Phase l Study, completed in March 2011, established process flow diagrams that included the feed pre-treatment, and relevant salt disposal, requirements for the six gasification technologies. Nine process flow sheets were prepared, including variations in the fluidised bed (2), slurry feed entrained flow (3), dry feed entrained flow (2) and one each for moving bed and Transport gasification processes.

The PPS Phase ll study aimed to establish the major plant and equipment specifications for the eight CTL process flow sheet options prepared in the Phase l report finalised in March 2011. These specifications are required to be sufficient for submission to technology vendors, and engineering, procurement and construction (EPC) contractors for the provision of plant package cost estimates (+/- 30 per cent precision), in the next phase of the PPS.

The plant and equipment specifications were based on mass and energy balances (MEB) for the major process plants incorporated in the process flow sheets. The MEB are also required to provide the material usage rates for operating cost estimates (+/- 30 per cent precision) in the next phase of feasibility studies.

The published information covering the lignite pre-treatment, gasification and LTFT fuels synthesis processes identified is a fair reflection of future performance expectations for the production of synfuels from the Scaddan lignite. A base case plant capacity of 25,000 tonnes lignite (+/- 15,000 barrels LTFT fuels) per day was used.

Conclusions and Recommendations

Mass Energy Balances were prepared for eight of the gasification technology flow sheets drawn in the PPS l study. One raw lignite gasification process was excluded due to the unavailability of suitable information. All MEB were based on a nominal processing rate of 25,000 tonnes per day raw Scaddan lignite. This rate enables the production of up to 16,000 barrels of LTFT diesel and naphtha fuels per day.

Raw lignite usage rates, LTFT fuel yields, carbon dioxide, ash, effluent and sulphur by-products production rates were compared for the eight process flow options. Process yields and utility rate data were based on the consultants May 2010 Gasifier feed pre-treatment and MEB study, the coal beneficiation laboratory results and MEB data updates from gasification technology vendors. It was concluded that LTFT fuels yields ranging from 0.40 to 0.70 bbl per tonne raw lignite were possible, based on the current level of Scaddan lignite pre-treatment and gasification technology vendor computer simulations. These yields are similar to the 0.64 value used in SEPL's project projections since 2008.

The yields analysis indicates a short list of technologies for detailed assessment:

- Process flow sheet Option 1 (0.64 bbl/t lignite)
- Process flow sheet Option 2 (0.58 bbl/t lignite)
- Process flow sheet Option 3 (0.54 bbl/t lignite)

Process flow sheet Option 4 (0.54 bbl/t lignite) Major plant and equipment specifications were prepared for the eight technologies considered, for use in assessing the ballpark costs of a short list of gasifier designs during the preliminary feasibility study.

Effluent treatment plant technologies and capacities will need detailed assessment.

This study has estimated process yields and plant requirements for eight lignite gasification technologies. It is considered important that Blackham select a short list that is sufficiently flexible for adaption to the gasifier and synthesis technologies finally chosen for the project.

CTL Products

The predominant products from a CTL facility would be a high quality diesel and naphtha with a by-product of sulphur. The diesel produced would be a direct import replacement product for Western Australia but also with the ability to export liquids through the Esperance Port. The study has assumed the use of the Fischer-Tropsch (FT) liquids process to produce diesel and naphtha.

CTL Plant Process

Milling and Pre-treatment

The first stage of the process is for the lignite to be milled and pretreated to permit it to be fed into the Gasifier. The de-watering process assumed in the PPS offers low energy consumption and the ability to remove much of the chlorine from the lignite. Laboratory scale performance testing of Scaddan lignite was undertaken and enabled the parameters for dewatering to be determined. During the feasibility study further work will be performed on the selection of the optimal drying process.

Gasification

Pre-treatment and drying of the lignite is required to ensure a suitable feedstock for most gasification technologies. The suppliers of the technologies have confirmed they believe their gasifiers are suitable for pre-treated Scaddan lignite pending fluidisation and gasification testing. Further gasification testing is required to confirm production yields.

Gas Conditioning, Fischer-Tropsch Production and GT Combined Cycle

The remainder of the plant complex consists of several well proven process units. The technologies and costs of which are based on a substantial background of commercial operation. They include the cryogenic air separation plant, combined cycle power plant, syngas conditioning plant, liquids synthesis plant and coal/ash handling plants.

Technologies, products and plant capacity

The nine process flow sheet options identified in the PPS Phase 1 were investigated through contact with each technology vendor, and updates of gasification performance expectations for the feedstock confirmed.

Products and plant capacity

Blackham has selected the synthesis of low temperature Fischer-Tropsch (LTFT) diesel and naphtha from syngas production by gasification of its Scaddan, Western Australia, lignite deposit. A base case processing rate of 25,000 tonnes raw lignite per day, equivalent to approximately 15,000 barrels (bbl) fuels per day was used in the comparison of the gasification technologies under consideration.

Mass and Energy Balances

The process flow sheets identified for the nine gasification technology variations in the March 2011 PPS l study were used to prepare eight MEB's. Both step-wise calculations (bottom-up) and overall published results (top down) methods were used to calculate these results. In most cases it was possible to check, and correct the yields, using estimates prepared by each technology vendor. Some significant differences in expected yield were found, some of which have yet to be resolved. These problems are attributed to the very general nature of many vendor estimates. It may be possible to eliminate these at the next stage of the project, viz. the feasibility stage, where a short list of technologies are investigated in sufficient detail, using pilot plant batch sized feedstock alternatives.

The MEB results have identified a range of LTFT fuel synthesis yields from 0.4 to 0.70 bbl per tonne raw lignite, which are at this stage considered (+/- 30 per cent precision), subject to confirmation in the selected technologies bench and pilot plant tests.

Potential Oil Production

The Scaddan and Zanthus Energy Projects have a combined coal resource of 1.4 billion tonnes containing over 10,600 PJ of energy and potential for 870 million barrels of oil equivalent mostly in the form of clean diesel. Blackham's attributable resource is 1.1 billion tonnes of coal.

There is also additional production potential from the 660-1,080 million tonnes of inventory coal.

The current Scaddan and Zanthus resources equates to 40 years worth of feedstock for a 60,000 barrel per day potential CTL facility. The initial Scaddan mine plan also confirms most of the resource in the pit area converts to mineable tonnes. The current pit shell would also allow for greater than 20 years worth feedstock for a 40,000 barrel per day operation. Further drilling of the Scaddan deposit is planned to increase the potential capacity of the project.

The Scaddan CTL project offers Blackham shareholders significant leverage to rising energy prices as world economies increase their economic growth.

Blackham continues discussions with various interested potential strategic partners with a view to development or sale of the Scaddan Coal & CTL Project.

For the complete Blackham announcement including tables, please view the following link:
http://media.abnnewswire.net/media/en/docs/69968-ASX-BLK-560507.pdf


About Wiluna Mining Corporation Ltd

Wiluna Mining Corporation LtdWiluna Mining Corporation (ASX:WMC) (OTCMKTS:WMXCF)  is a Perth based, ASX listed gold mining company that controls over 1,600 square kilometres of the Yilgarn Craton in the Northern Goldfields of WA. The Yilgarn Craton has a historic and current gold endowment of over 380 million ounces, making it one of most prolific gold regions in the world. The Company owns 100% of the Wiluna Gold Operation which has a defined resource of 8.04M oz at 1.67 g/t au. In May 2019, a new highly skilled management team took control of the Company with a clear plan to leverage the Wiluna Gold Operation's multi-million-ounce potential.

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Contact

Bryan Dixon
Managing Director
Blackham Resources
T: +61-8-9322-6418

Tony Dawe
Professional Public Relations
T: +61-8-9388-0944



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