Cline plans to reopen the mine later this year.
The Canadian producer received a preliminary assessment from Agapito Associates based on the mine operating at industry-competitive costs and using adjacent, first-class road and rail infrastructure.
The assessment estimated the operator’s internal rate of return on its investment should be 98.65%. The Las Animas County operation’s net present value is calculated to be $1.041 billion with payback of invested capital projected within 1.58 years.
New Elk, which will produce metallurgical coal for global customers over an initial 20-year period, is expected to see first production by the final quarter of this year and full output of 3Mtpa by 2013.
With a long, successful history of underground production already under its belt, New Elk has a measured and indicated coal resource of 315Mt in-place as documented in 2008 in an NI 43-101 technical report filed by Dolbear, an assessment which Agapito referenced and relied upon in its review.
At completion, the complex will contain a preparation plant, product coal silos and rail load-out, buildings, railway right of way, surface real estate, conveyor systems, electrics and underground workings with mine portal access from the plant site.
The mine permit also covers a coal refuse disposal site, and the operation will be accessed directly by paved highway from the town of Trinidad.
“The mine is connected by established road and rail networks throughout North America with unit train service to both west coast US and Canada and east coast US bulk coal terminals and access to the international seaborne coal trade,” the company outlined.
“Cline is continuing with the reactivation and upgrading of service infrastructure concurrently with the mine rehabilitation program.”
The producer added that it was seeking financing for its ongoing capital investment targets. As such, it has joined with several industry and investment institutions to aid in exploiting New Elk’s resource potential.
As well as in Colorado, Cline Mining has coal interests in British Columbia, Canada, and also mines iron ore in Madagascar and gold in northern Ontario, Canada.