Fresh from making its ASX debut, Montem Resources (ASX: MR1) has kicked off a drilling program at the Chinook Vicary area of its Chinook coal project in southwest Alberta, Canada.
The company just listed on the ASX last week after completing an $8 million initial public offering and aims to establish itself as a supplier of Canadian coking coal to the global steel industry.
Chinook Vicary is one of two areas in the project, the other being Chinook South. A JORC resource based on historical exploration results has estimated a total of 149.1 million tonnes of coal (103.8Mt indicated and 45.3Mt inferred) for the whole project, with the resource report including a Chinook Vicary exploration target estimate of an additional 125-450Mt coal.
Montem’s drilling program aims to confirm the Chinook Vicary product coal quality as hard coking coal. The area contains the historical Vicary mine, which exported high-quality hard coking coal to Japanese steel mills prior to shutting down in the late 1970s.
The drilling also intends to intersect and define areas of structurally thickened coal seams that were identified by historical drilling at Chinook Vicary, to investigate the open cut mining potential of the project.
Montem managing director and chief executive officer Peter Doyle said the drilling campaign is an important step for the company to progress its strategy of building multiple coking coal mines in the Crowsnest Pass region of Alberta.
“The Chinook project contains a large, high-quality coking coal resource that we believe has the potential to host a new large-scale mining complex,” he said.
“The concept study completed last year identified areas of high potential for open cut mining, and these are the areas where our drilling will focus this year,” Mr Doyle added.
Tent Mountain project
In addition to its exploration plans for Chinook, Montem is aiming to restart the Tent Mountain mine, also located within Crowsnest Pass. The mine closed in 1983 due to poor market conditions but it too had supplied hard coking coal to the Japanese steel industry.
The company completed a definitive feasibility study at Tent Mountain this year and said it would use its IPO funds to move the project to construction stage.
Montem is anticipating operating licences and final environmental approval in 2021 with coal sales forecast for 2022.