Baruun Naran gets resource boost

Vancouver — More than doubling the previous tonnage estimate, QGX (QGX-T, QGXLF-O) has released a revised resource calculation for its Baruun Naran coal deposit in the Gobi region of southern Mongolia.

Measured and indicated resources in the deposit now stand at 253 million tonnes of both coking and thermal coal, up significantly from the 107.5 million tonnes estimated a year ago.

“Much of this additional tonnage has been derived from coal which had been intersected in previous drilling but had insufficient intersections or associated coal-quality data to be included in the previous resource estimation,” says QGX president and CEO Paul Zweng.

The resource is contained in a number of major coal seams hosted in the Permian sedimentary basin environment. Baruun Naran is in a 22-km-long northeast-southwest-striking valley extending westwards from the large Tavan Tolgoi basin, located about 20 km away. Tavan Tolgoi, held by a Mongolian consortium, is estimated to host about 5 billion tonnes coal, a significant portion of which is metallurgical grade and potentially minable by open pit.

Drilling in the Baruun Naran valley has tested multiple 2- to 18-metre-thick coal seams in the Tavan Tolgoi Formation, which has a stratigraphic thickness of more than 800 metres.

Marketing, transportation and economic assessment studies are under way, with a prefeasibility study to begin soon.

“We are doing all we can to advance the project to production as rapidly as possible and we will be striving to complete the prefeasibility study before year-end,” Zweng says.

Involved in Mongolia since the mid-1990s, QGX acquired its licence for Baruun Naran in late 2002 and started work programs in early 2005. The company now has over 350 holes completed on the deposit.

In addition to its coal project, QGX has the Golden Hills gold-silver-copper project in western Mongolia where it completed a positive preliminary economic assessment earlier this year.

Barrick Gold (ABX-T, ABX-N) holds about a 9% interest in QGX.