Published in the August 2009 Coal USA Magazine
With a resource of around 110 million tons, and what could be a landmark operation for the Canadian underground coal industry on the line, Compliance Energy is working feverishly to complete the feasibility study on its Raven complex that will allow this bird to take flight in 2012.
The Vancouver-based producer is preparing a bankable feasibility study with Pincock, Allen and Holt on the greenfield property. The company has received some vital and encouraging data from an ongoing drilling program near Nanaimo, British Columbia.
In fact, the company said in July that 20 of its 53 permitted holes had been drilled to a total 16,300 feet from an allotted 49,200ft.
From that progress a significant amount of the previous reported inferred resources of 65Mt can be upgraded to the measured or indicated categories. From five coal intersections realized through drilling, Compliance official Greg Werbowski said the company was particularly interested in Seams No. 1 and No. 3.
“Seam 1, which is the seam of primary economic interest and accounts for over 90 per cent of the resource, has been intersected in all 20 holes at an average thickness of 10.6ft, or 1.4ft thicker than the typical thickness of 9.2ft,” he noted.
“Seam 3, which is the second seam of economic interest, was intersected in 16 of the 20 holes and was of a mineable thickness (equal to or greater than 5ft) in 12 holes. Where Seam No. 3 is present in mineable thicknesses it averages 8.6ft, or 3.6ft thicker than the typical thickness of 5ft.”
Compliance is developing Raven as part of a joint venture signed in February with Japanese firm Itochu Corporation and Korea-based LG International.
Both companies have elected Compliance as the complex’s managing owner. Werbowski said the two companies were chosen for their knowledge of international trading markets – where the output of this new mine will be headed once mined and prepared – as well as prior work in the coal industry.
While many details of the operation won’t be known until the feasibility study is completed in April 2010, Werbowski said given the thickness data as well as the location of identified structural faults in the resource, Raven will most likely have a long future as a slope-portal, room and pillar operation.
Due to an outcrop on the western side that dips to the east and northeast at about 15%, overburden will vary with location. On the eastern side, engineers have estimated 300- 400m of cover, but on average the depth will be 150-200m.
While no thought has been given yet to equipment fleet size, original equipment manufacturers or technology to be employed, Compliance officials expect Raven will have about 125 workers when it is commissioned in mid-2012.
Feasibility study aside, the producer’s focus is on the completion of all necessary permitting by the end of next year so that construction can begin in the first quarter of 2011.
Compliance is still waiting for information on quality and washability statistics. Core samples have been sent to GWIL Industries’ Birtley Coal & Minerals Testing Division in Calgary for analysis and results are due back this fall.
The company will also complete methane testing later this year to determine gas content, and noted the issue would be dealt with accordingly if it was present in the resource.
At a raw coal production rate of about 2.4Mt per year, clean coal production will range from 1.1Mt of coking coal to 1.6 Mt of thermal coal (or some combination thereof), depending on the results of the upcoming washability tests.
Raven has quite a future ahead of it – officials estimate the complex will be a fixture in the quiet surrounding coal towns for at least two decades.
Compliance officials noted the property would hit the ground running once production had received the green light.
A four-lane highway and railway is nearby, 10in gas pipeline and high-voltage transmission lines already exist across the 7660-acre coal deposit, and several options have been made available for port facilities. However, Werbowski said capital would be required to upgrade some of those possibilities for proper and economically sound use.
Long term, the company said there was a great deal of potential for expansion. Its nearest active neighbor is the Quinsam complex – a property that, as of press time, was involved in a hostile takeover of owner Hillsborough Resources by Vitol – some 50 miles north.
The Bear deposit adjacent to Raven could be mined as part of the company’s long-term plans, and contains an estimated 9.4Mt (5.5Mt surface mineable).
In fact, Compliance has an interest in more than 75,000 acres of undersurface rights on Vancouver Island, with most of these in the Comox Coal Basin. Based on a geological report completed in the 1970s, the basin could hold upwards of 800-900Mt of coal.
As the clock quickly ticks down to the crossroads where PAH’s feasibility study will more concretely determine Raven’s future, Werbowski said the operator was looking forward to seeing the complex come to fruition.
Raven: a history
According to Compliance, an initial technical report on the property filed by Gardner Exploration Consultants indicated metallurgical coal resources of 42.4Mt. Others have drilled the site previously – about 160 drillholes since the early 1900s with approximately half of those since 1975. In 1996 about 8.5 miles of seismic surveys were performed.
Historical production from a portion of the deposit realized 2-3Mt of coking coal from1949 to 1966.
Preliminary reports indicate that Raven coal is good quality, with13,680 Btu/lb, ash of 9.5% (washed) and a free swelling index of 8.
Compliance’s involvement with the project began in 2005, when it was given the option for Raven (an option exercised in November 2008).
After 13.1 miles of seismic exploration was completed by Florida-based EMEX, Compliance completed its geological model in 2007 when it also finalized the initial resource estimate of 43Mt measured and inferred, and 65Mt inferred.
