Guildford, through its subsidiary Terra Energy, holds a number of coal tenements in Mongolia, all located in the South Gobi and Mid Gobi coal bearing basins.
The South Gobi project is located 1000km southwest of the town of Ulaanbaatar and about 60km from the Chinese border station of Ceke.
The project has a JORC coal resource of 70.4 million tonnes of coking coal for the proposed north pit and an indicated resource of 39.7Mt.
Guildford believes the mine has the potential to produce 4 million tonnes per annum of coking coal.
The miner is anticipating all necessary approvals for mining, transport and export of coal from South Gobi to be received ready for mine start-up in mid-2012.
Final mining contract negotiations will be carried out in mid-May, with an anticipated eight to 10-week mobilisation period from the mine’s start-up.
Guildford Coal said the interest in coal offtakes received from the ten parties consisted of Chinese and Korean end users and large international coal trading houses.
Detailed discussions with short-listed parties was progressing, with the aim of finalising offtake agreements during the June quarter 2012.
In addition to this, Guildford’s Middle Gobi project is picking up pace.
The project, comprising two exploration licences in the Dundgovi province, is located approximately 200km south of Ulaanbaatar.
Guildford said coal from the Middle Gobi project could be trucked to the Trans-Mongolian railway, where it could then be transported by rail to Chinese and Russian markets.
The potential for the Middle Gobi project is for a large scale open cut operation, supplying thermal coal to Mongolian and Chinese electricity generators.
Further drilling at the project will be undertaken in the second quarter of 2012, with the focus on expanding the JORC-compliant resource.