Hillsborough drills for more coal

Vancouver — Recent drill programs by Hillsborough Resources (HLB-T, HLSRF-O) are expected to boost resources at the producing Quinsam coal mine on Vancouver Island, and upgrade resources at several advanced coal projects elsewhere in British Columbia.

Results from the fall drill program at Quinsam are being compiled and will be incorporated into an updated resource estimate and National Instrument (NI) 43-101 technical report. A year ago, reserves and resources stood at about 25.64 million tonnes. The thermal coal mine operates at an annualized rate of about 765,000 raw tonnes, or about 520,000 clean tonnes.

On the mining front, the company notes that operating challenges encountered in the third quarter of 2005 have been resolved, with the mine operating at “very healthy” production rates in the fourth quarter. A new 3-year coal supply contract with a major cement manufacturer was recently signed, adding to the mine’s long-term customer base.

Hillsborough also reports progress toward finalizing a joint venture with Anglo Coal, a unit of Anglo American (AAUK-Q), for its Five Cabin and ancillary coking-coal properties near Tumbler Ridge, B.C. While a final agreement was not in hand by year-end as expected, the company says the transaction is “progressing positively” and more details will be provided in early 2006.

Hillsborough has been drilling the Five Cabin property since March 2005, with 170 holes totalling 17,000 metres completed to date, including a large-core bulk sample. A NI 43-101 technical report, complete with updated resource estimates, is being prepared by an independent engineering firm and should be released in early 2006.

The technical report will provide resource estimates for the Barbour, Horizon and Northridge blocks at Five Cabin.

The regulatory approval process for the Horizon mine is under way, with project certificate and mine permit applications proceeding parallel to a feasibility study, scheduled for completion in mid-2006. Pit design and mine planning at Horizon are based on a production scenario of 1.2 million to 1.6 million tonnes per year of coking coal from the Barbour, Horizon and Northridge pit areas.

In Tennessee, Hillsborough recently achieved commercial production at its Crossville underground mine. A NI 43-101 report that will include results of recent drilling at the property is expected shortly. In southeastern B.C., Hillsborough is developing the Bingay Creek metallurgical coal project in the Elk Valley region.