Guildford on track to Mongolian coal production

GUILDFORD Coal has increased its stake in Mongolia-based Terra Energy LLC by 50% to take a shareholding of 70% after it received positive results from exploration on the South Gobi and Middle Gobi coal projects.
Guildford on track to Mongolian coal production Guildford on track to Mongolian coal production Guildford on track to Mongolian coal production Guildford on track to Mongolian coal production Guildford on track to Mongolian coal production

Mining in Mongolia, image courtesy of Austrade.

Lauren Barrett

The Queensland headquartered explorer signed a $10 million deal to acquire the 70% stake, which follows on from the initial $7 million deal originally marked to attain 20% of Terra Energy LLC back in March.

Guildford non-executive chairman Craig Ransley said promising analysis results of historical drilling in the exploration projects will allow the company to jump into coal production within a year.

“The existing Terra Energy LLC projects have potential large scale thermal and coking coal prospects and represent an opportunity for Guildford to become a coal producer within 12 months as the South Gobi Project is located close to the Chinese border station of Ceke where coal from Mongolia is already trucked into China,” Ransley said.

Drilling on the projects started in April, with more than 8500 metres drilled so far.

South Gobi is the flagship project with a predicted exploration target of up to 460 million tonnes.

Middle Gobi has an exploration target of 29-149Mt and is located approximately 200 kilometres north of the Tavan Tolgoi Project.

Five drill rigs are currently operating in the thermal and coking coal projects, including four in South Gobi and one in Middle Gobi.

Meanwhile, Terra Energy LLC has entered into a heads of agreement for the acquisition of a 100% stake in a Mongolia-based company that holds mining licenses and exploration permits in Javkhlant project, the Mandal Ovoo Project in the South Gobi and Deliin Shand.

The heads of agreement will be subject to due diligence by GUF and Terra Energy LLC.

Ransley said if due diligence results are satisfactory, the addition of these projects will give Terra Energy LLC one of the largest portfolios of coal projects in Mongolia.

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