In less than a year of exploration in Mongolia, Red Hill Energy (RH-V, RHFFF-O) has built a coal inventory of more than 1 billion tonnes — a 193% increase in tonnage since Sept. 10 — from two coal projects in the country’s rich Nyalga coal basin.
Red Hill recently announced a resource at its Chandgana Khavtgai coal deposit of 678.4 million tonnes coal, with 188.7 million tonnes measured and 489.7 million tonnes indicated. The property also has an inferred resource of 439.6 million tonnes.
Chandgana Khavtgai is next to Brazil’s Companhia Vale do Rio Doce’s (rio-n) lead-coal project, 300 km east of Ulaanbaatar.
About 9 km northeast of Chandgana Khavtgai, Red Hill’s sister property Chandgana Tal holds 504.5 million tonnes coal classified as measured resources and 524 million tonnes indicated, with another 475.5 million tonnes inferred.
In both Chandgana projects, the coal is outcropping so there is easy access to the coal seams, the company said in a statement. Stripping ratios are low, at about 2.1 at Chandgana Khavtgai and 0.53 at Chandgan Tal.
The Nyalga basin is accessible by road. The nearest railroad is 160 km west, with links to China to the south and Russia to the north.
In addition to its two properties in the Nyalga basin, Red Hill holds the Ulaan Ovoo coal project in northern Mongolia, which has a National Instrument 43-101-compliant resource of 208.8 million tonnes coal (174.5 measured and 34.3 indicated) and an additional 35.9 million tonnes inferred.
On the Toronto Venture board, Red Hill shares closed at $1.15 a share on the news, up 23, on a trading volume of 1.2 million.
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