Morien Resources Corp., the spinoff from Dartmouth, Nova Scotia-based Erdene Resource Development that is developing Donkin and owns a 25% stake in the project, said it was pleased with the regulatory approvals and considers them “the passing of a major milestone for the Donkin project, and will work diligently with other stakeholders to advance the project in a timely manner.”
In late summer, Morien planned to step up discussions with GlencoreXstrata about acquiring the remaining 75% interest in Donkin. Morien officials are pointing toward a possible deal with GlencoreXstrata in September. A Morien official said the company “continues to work closely with a group of prospective operating, marketing, coal purchasing and financial partners as we actively pursue the path of acquiring Xstrata’s 75% interest.”
Assuming the transaction with GlencoreXstrata is final in the third or fourth quarters, Morien could initiate codes of practice approvals with the government, a process that could take about three months. That would allow Morien to begin tunnel refurbishment. Mining could probably get under way as early as the fourth quarter of 2014.
Donkin will be a continuous miner operation producing about 3.5 million metric tons (mt) annually of run-of-mine coal or 2.75 million mt of washed coal annually. The developers are eyeing the international export coking, thermal coal export and thermal domestic coal markets. For instance, Morien is hoping to enter into an arrangement to sell thermal coal to NB Power, formerly New Brunswick Power.
Donkin will produce coal from the Harbour seam, characterized by low ash, high energy, high fluidity, high crucible swell number and elevated levels of sulfur. A report prepared by Marston & Marston, a consulting firm in St. Louis, Mo., said the coal’s anticipated 3% sulfur content is “above the typical range for hard coking coal, which ranges to a maximum of 0.8%…however, this does not preclude the use of this coal in coking coal blends for the manufacturing of coke.”