Fortune Minerals Limited and POSCO Canada Ltd announced that the Klappan Coal Joint Venture has retained Marston Canada Ltd a division of Golder Associates Ltd to update the geological model, coal reserves and feasibility study for the Lost Fox deposit area at the Mount Klappan anthracite metallurgical coal project in northwest British Columbia, Canada.
KCJV is a joint venture between Fortune (80%) and POSCAN (20%), the Canadian subsidiary of Korean steel producer POSCO, the world's third largest steel producer. Fortune has also engaged Deloitte & Touche Corporate Finance Canada Ltd to help attract additional strategic and financing partners for the project. The updated Marston study will incorporate the results of additional drilling and survey data that was conducted earlier by Fortune as well as updated coal price assumptions that are anticipated to materially impact the reserves for the proposed mine. The new reserves and updated feasibility study are expected to be completed in mid-2012.
Fortune conducted additional drilling at the Lost Fox deposit area in 2005. This work was done to verify the geological model and coal resources in an area that had previously been classified as Inferred within the former pit shell and were therefore excluded from the reserves and financial model. Drilling was also carried out to test for lateral extensions to the coal seams beyond the former pit shell, as well as to collect geotechnical and environmental information to support project permitting. The results of this work were very successful in confirming the coal and its geometry within the former pit configuration, and also in extending the Lost Fox deposit beyond the pit limits. Fortune also conducted a detailed airborne LIDAR laser topographic survey of the Lost Fox deposit area and proposed mine site that was not incorporated into the previous geological model. This more detailed survey information will improve the accuracy of calculating the waste to coal ratios and strip volumes.
The previous Lost Fox reserves were also based on lower coal price assumptions in 2005 and are now out of date. Marston is updating the geological model and the in-situ and clean coal reserves to reflect the results of the new drilling and survey data and more up to date coal price assumptions.
