Guildford puts Australia on hold

GUILDFORD Coal has kept its focus on the development of its South Gobi mine in Mongolia, leaving its three Queensland projects to sit mostly idle during the second quarter.
Guildford puts Australia on hold Guildford puts Australia on hold Guildford puts Australia on hold Guildford puts Australia on hold Guildford puts Australia on hold

Image courtesy Guildford

Staff Reporter

“No significant additional exploration was carried out in Queensland during the quarter with the company focusing efforts on the development of its South Gobi asset in Mongolia,” Guildford said.

However, work on an agreement signed in December 2012 to partner with major logistics company Asciano to develop an integrated “pit to port” solution for mines in the northern Galilee region continued during Q2.

Guildford said the initial stage of information gathering and engagement of key partners including the Port of Townsville had progressed.

Guildford’s Clyde Park coal project is an early stage open pit development opportunity located northwest of Pentland.

No work was undertaken during the quarter and no work has been planned for Q3 as the project awaits the approval of a mining lease application.

Guildford successfully delineated a substantial coal resource at the Hughenden project, which it said appeared suitable for underground mining methods.

Further drilling to improve the confidence level around this resource will continue at an appropriate time yet to be determined.

Guildford said several small sub-blocks within tenements EPC 1480 and EPC 1576 were relinquished during the quarter.

In early 2013, a maiden JORC resource of 252.6 million tons was identified from Guildford’s Springsure project but no significant additional work was undertaken this quarter.

Guildford has spent the second quarter continuing the transition from an explorer to a producer in Mongolia through the development of the north pit of the South Gobi project.

The company aims to commence production at South Gobi in the fourth quarter and has been working on pre-mining activities to ensure it meets this target.

Guildford spent $A9.6 million during the quarter on operating costs but closed the quarter with a total of $25.7 million due to a convertible bond facility to the value of $US39.4 million established during the quarter.

The facility provided by OCP Asia was fully drawn down on April 30 and has an 18-month term to maturity with a minimum conversion price of 45c a share.

At June 30, Guildford had total financing facilities of $59.4 million.

During the quarter pre-mining at South Gobi commenced, including the removal of overburden by contractor Grand Power Mining and excavations on three test pits for coal quality testing.

Larger equipment including a Caterpillar 300-ton excavator and Caterpillar 777 (80t) dump trucks recently arrived at the site.

Guildford said progress on development of the box cut was progressing as scheduled, while initial quality specification parameters were encouraging.

It is expected that potential customers will visit the minesite from August, with the conclusion of offtake negotiations shortly after.

Construction activities, including the accommodation camp, workshops, fuel bay, offices and crushing plant, are scheduled to commence in August.

A planned drilling program at the north pit to verify an increase in mineable reserves is also progressing and due for completion in October.

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