Vancouver — QGX (QGX-T, QGXLF-O) has produced its awaited resource estimate for the Baruun Naran coal deposit in the Gobi region of southern Mongolia.
The independent review shows a measured and indicated resource of 107.5 million tonnes plus an additional 48 million tonnes of inferred resource. Eleven separate coal seams were integrated into the resource study, which only included sections of those up to 300 metres below surface.
The resource covers about a 6.5-km portion of the 22-km long Baruun Naran valley. It is expected that about half of the 107.5-million-tonne resource, occurring within seams H500 and T500, could be categorized as metallurgical-grade. Some additional near-surface coal seams, representing more than 50 million tonnes, were not included in this resource estimate due to limited lab data for samples. The independent engineering group conducting the study, McElroy Bryan Geological Services, acknowledges additional coal probably exists to the west of the current resource and along its northern and southern flanks.
QGX president and CEO David Anderson said the company believes the initial resource can support a 5- to 10-million-tonne- per-year operation supplying metallurgical and thermal-grade coal to Mongolia and China for more than 10 years.
The Permian sedimentary basin hosting the Baruun Naran coal deposit is a northeast-southwest-striking corridor extending westward from the large Tavan Tolgoi basin, about 20 km away. Tavan Tolgoi, held by a Mongolian consortium, is estimated to host more than 5 billion tonnes of coal resource, with a majority being metallurgical-grade and potentially amenable to open-pit mining.
QGX initially acquired its licence for Baruun Naran in late 2002 but only began its work programs in early 2005. The company now has over 215 holes completed on the deposit. Both previous Russian and current QGX drilling of the synclinal structure have shown at least 24 separate coal seams identified over about 1,000 metres of sequence. Coal-bearing horizons have been identified over at least a 1.5 by 10-km area of the basin.
In addition to its coal project, QGX has the Golden Hills gold-silver-copper project in western Mongolia.
A recent copper and gold windfall tax passed by Mongolia’s parliament has caused the company’s share price to sink below $2.00 after touching a high of $5.80 in late 2005.
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