Marston will update the geological model at the Lost Fox deposit area of the Canadian project, as well as its coal reserves and feasibility study.
“The updated Marston study will incorporate the results of additional drilling and survey data that was conducted earlier by Fortune, as well as updated coal price assumptions that are anticipated to materially impact the reserves for the proposed mine,” the company said.
It confirmed the new reserves and updated feasibility should be complete by the middle of this year.
The Klappan project is a joint venture between Fortune, which holds 80% and Poscan, the Canadian division of South Korean steel producer Posco, which has 20%.
The two closed their JV agreement in August 2011.
Fortune also retained accountant Deloitte & Touche Corporate Finance Canada for assistance in attracting more strategic and financing partners.
The miner performed drilling at Lost Fox in 2005 to verify the geological model and coal resources in an area previously classified as inferred within the former pit shell – work which excluded it from the reserves and financial model.
Drillers also tested for lateral extensions to the coal seams beyond the former pit shell at the time for the collection of geotechnical and environmental information that could support project permitting.
“The results of this work were very successful in confirming the coal and its geometry within the former pit configuration and also in extending the Lost Fox deposit beyond the pit limits,” the company said.
Fortune also performed a LIDAR laser topographic survey of the deposit and proposed minesite that had not been included in its previous geological model.
“This more detailed survey information will improve the accuracy of calculating the waste to coal ratios and strip volumes,” it said.
The company said previous reserves were also based on a lower price assumption in 2005 and were now out of date.
“Marston is updating the geological model and the in situ and clean coal reserves to reflect the results of the new drilling and survey data and more up-to-date coal price assumptions,” the company said.
“Based on the updated Lost Fox geological model and reserve estimates, Marston will re-optimize the open pit shell and develop new production schedules.
“The initial planned annual production rate will remain at 3 million tonnes per annum and the design of the process plant and railway infrastructure will not be changed from the previous Lost Fox feasibility study that was conducted by Marston in 2010.”
Fortune purchased the deposit in 2002 and last August said it would spend an estimated $C768 million to get the mine into full production, including $317.8 million for a 150km CN Rail railroad connection and upgrade for shipments to the Prince Rupert deep water port.
The Mount Klappan metallurgical coal project, made up of 15,886 hectares of exploration licenses in northwest British Columbia, contains speculative resources of 2.2 billion tons and measured resources of 107.9 million tons.