Perth, Feb 12, 2009 AEST (ABN Newswire) - Jameson Resources Limited (ASX:JAL) is pleased to announce that it has completed its due diligence in relation to an option to acquire 100% of the development rights to the Basin Thermal Coal Mine ("Basin" or the "Project") in British Columbia, Canada, from Compliance Energy Corporation (CEC). CEC holds an exclusive mining agreement to develop the Project.
With the due diligence successfully completed, the company has paid the initial Option consideration to CEC, being the payment of C$1,000,000 cash and the issue of 7,407,408 shares in the Company.
Jameson has also executed a formal Share Sale Agreement to acquire 100% of the share capital of NWPC Pty Ltd (NWPC), and issued 5 million fully paid ordinary shares and 15 million performance shares to the shareholders of NWPC. A recommissioning study to start production under the existing 250,000 tpa mining permit will commence immediately. Pending a successful outcome of the study, production could be fast tracked to commence before the end of 2009.
The Basin Coal Mine has an existing NI43-101 resource of 19 million tonnes of raw thermal coal. The resource is confined to a 17 metre main seam (5 times the Australian coal seam average) extending over a 1.5km strike length. A second seam of 7 metres underlies the main seam but has not been included in the resource. Significant exploration upside remains both along strike and down dip. In addition only limited exploration has been undertaken along the eastern flank of the Tulameen Basin.
Clean coal specifications will have a calorific value of 6080kcal/kg, 12-16% ash, total moisture content of 10% and 0.5% sulphur. Basin is the closest mainland coal project to the western Canadian ports and has good rail and road access with significant available capacity. Existing infrastructure including logging roads, loading facilities and rail will significantly reduce the capital cost for the recommencement of operations.
Basin's operating costs are estimated at approximately US$50 per tonne, well below current spot prices for thermal coal. Based on the current coal price the Project could generate cash operating margins of around US$40 per tonne Prospective buyers of thermal coal include international utilities and local cement manufacturers. A number of potential overseas and domestic off-take partners have already expressed an interest in the Project.
Corporate
Jameson is now in the process of finalising a capital raising of $1,500,000 (Placement) which is being managed by Capital Investment Partners (CIP) and Chess Capital Partners (Chess Capital). CIP and Chess Capital will each be entitled to receive a capital raising success fee of 1,000,000 unlisted options in Jameson exercisable at $0.20 on or before 30 November 2010, which will be issued by Jameson upon completion of the Placement.
Summary of the Basin Coal Mine
The Project is located 30km northwest of Princeton, British Columbia. CEC has the right to develop and mine the coal on licences covering 2,172 ha. The mine tenements cover most of the Tulameen Syncline, of which the Province of British Columbia government has estimated the global resource to be 240Mt of coal. Mining at the Project began in 2002, but was ceased in 2006 when the provincial government abolished the use of coal power plants in British Colombia. Infrastructure such as roads, a coal washing process plant and crushers were left behind.
A Technical Report on the Project was completed in 2001 and revised in 2002 by Robert McKnight. The coal resources of the Basin Coal Mine were calculated in accordance with the requirements of National Instrument 43-101 (equivalent to JORC reporting standard) and the NI 34-101 Companion Policy that requires utilising the guidelines of Paper 88-21 of the Geological Survey of Canada: A Standardised Coal Resource/Reserve Reporting System for Canada. The report noted that the main coal seam thickness over the drilled section of the property measures between 17m and 34m with dips ranging from 28 to 45 degrees. A further coal seam of 7m was found below the main coal seam which is not included in the coal resource estimates.
Coal from the deposit is classed as a high volatile bituminous C thermal coal with low sulphur content, ideal for energy use.
Currently, 1000m of the main coal seam is exposed. The initial pit development was designed to be 1.3km long and was drill tested over a 2.5km strike length. Significant exploration upside has been identified both down dip and along strike of the Project and on the eastern flank of the Tulameen Basin.
The Jameson Board believes that the acquisition of the Basin Coal Mine Project, has the potential to develop into a +1mtpa coal operation and should deliver significant upside for Jameson shareholders.
A video presentation of the Basin Coal Project is available on the Company website:
http://www.jamesonresources.com.au
Any inquiries regarding this announcement should be directed to Jameson's Executive Director, John Holmes.
Contact
John Holmes
Executive Director
79 Hay Street, Subiaco 6008
Western Australia
Phone +61-8-9200-4473
Fax +61-8-9200-4463
john.holmes@jamesonresources.com.au
www.jamesonresources.com.au
David Prentice
Non Executive Director
david@redforkenergy.com.au
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