Hillsborough advances Horizon to feasibility

Vancouver – A newly completed, independent scoping study has convinced Hillsborough Resources (HLB-T) to advance the Horizon coal project near Tumbler Ridge, B.C., to the feasibility level.

Hillsborough currently operates the Quinsam underground thermal coal mine near Campbell River, B.C., which serves the local and West Coast (Canada and U.S.) cement industry. The company also holds various metallurgical coal properties in northeastern British Columbia, including the Horizon project and the Wapiti thermal coal project, along with the Bingay Creek metallurgical coal property in the Elk Valley district of southeastern British Columbia.

The Horizon scoping study completed by Norwest Corporation was based on a 15-year mine plan supported by a resource base for projected production levels ranging from 1 million tonnes to 1.7 million tonnes per year. The mine plan focused on two underground mining areas, with lesser production from two smaller pits.

At last report, Horizon hosted measured and indicated resources of 49.7 million tonnes, generally based on practical limits for existing underground mining technology. Recoverable run-of-mine underground coal tonnage was estimated at 26.9 million tonnes, using room-and-pillar methods similar to those used at Smoky River Coal in northern Alberta.

The study projected an internal rate of return of 26%, and net present value of $64.1 million at a 10% discount rate, and also identified potential to improve economics by expanding resources and boosting production levels. The company has already drilled a nearby property with potential open-pit tonnage and plans to incorporate the results into the feasibility study.

Hillsborough is also looking to develop the Wapiti coal property near Tumbler Ridge, and recently struck a deal to supply thermal coal to AES Wapiti, which is developing a nearby new coal and biomass powered plant and a 350-km transmission line.

Construction is slated for late 2007, assuming receipt of necessary approvals. Mine development would begin one year prior to the opening of the power generation facility, expected in 2010.