Atrum developing Canadian coal assets


by Lelde Smitts

Transcription of Finance News Network Interview with Atrum Coal Limited (ASX:ATU) Technical Director, Dr Eric Lilford

Lelde Smits: Hello I’m Lelde Smits for Australia’s Finance News Network and joining me from Atrum Coal Limited (ASX:ATU) is Technical Director, Dr Eric Lilford. Eric, welcome to FNN here in Hong Kong at Mines and Money.

Dr Eric Lilford: Thank you very much.

Lelde Smits: Atrum Coal is focused on metallurgical coal exploration and development. Could you detail the Company’s vision?

Dr Eric Lilford: Atrum has taken itself to being a specialist coal or metallurgical coal explorer and ultimately a producer. So our intention, as far as vision is concerned is to take these assets we have in Canada and to take them through the full exploration phase, prefeasibility, feasibility, construction commissioning development and obviously into production.

Our intention is to be a low cost, low capital producer, producing as I say, a specialist product going into typically the steel sector. I like to call our coal, coal for steel - that will be its primary use. But we do have grades of anthracite within the field that’ll have a specialist use as well, such as water filters believe it or not.

Lelde Smits: Where are Atrum Coal’s projects located and what is your stake in each?

Dr Eric Lilford: Our projects are located in British Columbia, Canada approximately 1,200 kilometres north west of Vancouver or more explicitly, about 1,000 kilometres west of Edmonton. So if you remember where the winter Olympics were a number of years ago, Edmonton. We’re somewhat to the west, but unfortunately we don’t get to watch the games too often. But over and above that, we are sitting in the British Colombia which happens to be a very attractive destination, as far as mining projects are concerned.

Lelde Smits: So what attracted Atrum Coal to entering British Colombia, and how is the region working to support your development plans?

Dr Eric Lilford: It used to have a large amount of mining taking place within the region. Some of it has come off, but what we’ve managed to do is find a highly attractive project within the area. And we are obviously taking it through to its natural conclusion, which as I say, will be in production. The advantage that we’ve got in British Colombia is that it is supported with significant infrastructure.

So we have rail networks close at hand, we’ve got road, we’ve got access, we’ve got landing strips close to the project. And we’ve got a skill set sitting in and around the area, who have knowledge of mining and specifically mining coal. So we’re looking at a very pretty region as far as the location of our asset is concerned.

Lelde Smits: Now Eric looking closer at your Groundhog coal project, what is the size of the current resource?

Dr Eric Lilford: So at the end of this month, we’re going to announce an upgrade to that resource above the 338 million tonnes, and to coin a word used by one of my colleagues in Atrum - it’s massive.

Lelde Smits: And what are your intentions for the Groundhog coal project?

Dr Eric Lilford: Our intention is to take a larger resource and then start doing the conversions into a reserve, and what that means is an additional drilling program. So over the next few months, other than an upgrade on the resource, our intention is to remobilise those drill rigs and start doing some infill drilling in order to prove up additional resources, but more importantly, for lab work to be able to convert resources to reserves.

Lelde Smits: Now Atrum Coal is targeting an initial two to three million tonnes per annum at the Groundhog coal project. What timelines have you put on delivering this operation?

Dr Eric Lilford: So the target of two to three million tonnes per annum is still a very real target. I do expect the timeframe to be shorter than what we originally said. I can’t exactly say what that timing is because we’ve got quite a bit of work we’ve still got to do. The next six months we are going to be extremely busy and we should be able to, sort of redefine our timetable.

Lelde Smits: And Eric, what do you anticipate will be the Groundhog coal project’s next major milestone?

Dr Eric Lilford: As we’ve said to the market, we’ll be coming out with a resource upgrade at the end of March. We are still on track to do exactly that. Post that, we are mobilising the drill rigs to get into the infill drilling program and post that, during the course of this year, will be the conversion of resources to reserves. I think those are three very big milestones that we face in the short term, and very exciting ones too.

Lelde Smits: Finally Eric, as your exploration activities continue and the data rolls in, what do you anticipate will be your biggest share price drivers this year?

Dr Eric Lilford: Most important thing that we’re doing during the course of this year will be the conversion of resources to reserves. I think the market is looking to understand a little bit more detail around what our resource base is, as we’ve said 338 million tonnes. And if you consider – you asked the question earlier about production rates, but if you consider say, 200 million tonnes per annum and you’re sitting with 338 million tonnes of resource. If you convert that to reserve and call it a number, say 200 million tonnes, we’d have over 100 years’ worth of mining.

However, we don’t have reserves yet, so our intention is to put those drill holes in, the infill drilling program, diamond drill holes, test the market and actually convert our resources to a reserve. And I think that’s looking on track this year and looking very attractive too.

Lelde Smits: Eric Lilford, thank you for joining us in Hong Kong and for the introduction to Atrum Coal.

Dr Eric Lilford: You’re welcome, thank you very much.