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Unst Khudag Coal Mine & Har Toirom Discovery
The Company owns 80% of the Unst Khudag Thermal Coal Project which is located in Dundgobi province, 290km from Ulaanbaatar, and approximately 180km from the Mongolian railway grid. The project consists of two exploration licenses and one mining license covering over 59,000 hectares of area. The mining license covers approximately 1,600 hectares.
The Company implemented an aggressive drilling programme prior to the end of 2010 and is currently processing the results. The exploration and modelling of the coal deposits in the Unst Khudag Project area has principally focussed on the recently discovered Har Toirom Deposit and has resulted in the definition of a JORC Resource of 324Mt to a depth of 140m. Within this deposit there is an estimated 226Mt which can be classified as Measured and Indicated (refer Table 1). The Resource is based on approximately 30% of available data.
Table 1: Har Toirom Deposit JORC Resource Summary
| Resource Category | Tonnes Mt |
| Measured | 18.85 |
| Indicated | 207.40 |
| Inferred | 98.00 |
| TOTAL | 324.25 |
Exploration has located a number of thick, shallow coal seams with an average calorific value of 6,784 kcal/kg dry ash free (daf), which are available for potential economic open cut extraction and sale as a thermal coal product. Ongoing studies will be carried out to assess the mining, metallurgical, economic, environmental, and other aspects to enable the estimation of Coal Reserves in accordance with the JORC Code.
Work is progressing on the Unst Khudag Deposit which has been substantiated by recent drilling and preliminary modelling. Coal resources estimated in compliance with the JORC Code will be defined and reported in early 2011.
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