Gobi Coal & Energy (Gobi Coal) has announced its ongoing strategic initiative to expand across the energy resources value chain into hard coking coal, coking coal mine consolidation, and graphite and uranium development and mining both inside and outside of Mongolia.
During 2015, Gobi Coal successfully completed a drilling program at its primary coking coal mine at Shinejinst. The drilling program consisted of a total of 637.3 meters of drilling comprised of 8 diamond core boreholes that enlarged the deposit area to the southeast with average coal thickness of 9.3m. One hole returned an exceptional coal seam of 44m in thickness with low volatile materials. 76 coal quality samples were obtained in 2015 and submitted to a laboratory for testing with subsequent results confirming hard coking coal properties and the potential for a new sub-basin at Shinejinst. Successful water testing confirmed that the area has significant water potential, which is very important for future mine development.
During 2014 and 2015, the company engaged in detailed analyses of, and negotiations with, several coking coal companies throughout Mongolia as part of a broader consolidation strategy. The aim is to build economies of scale and pricing power for the export of coking coal into China from southwest Mongolia at Ceke where pricing is significantly below international benchmarks. Negotiations are ongoing and will continue during 2016 in relation to Gobi Coal’s mine at Shinejinst.
In 2015, it analyzed numerous uranium acquisition opportunities with a focus on the China market.China has a reported 30 reactors in operation, with 24 new reactors under construction, another 40 planned, and 136 proposed which will result in a three-fold increase in its nuclear capacity by 2020-21.
Reactors in operation worldwide are already consuming in excess of 10,000 tons of uranium per year more than current global mine production capacity. This supply-demand imbalance is expected to grow sharply asChina reactors enter operation with each new reactor requiring this amount to commence operation and sustain the plant operation for the first few years of use. Gobi Coal is currently in negotiations regarding a potential stock acquisition of a promising uranium property in Mongolia.
In addition, Gobi Coal has reviewed several high grade graphite mining investment and acquisition opportunities worldwide. The graphite market offers an exceptional opportunity for Gobi Coal to diversify into “new energy” mining resources that are experiencing robust and increasing demand in the market as a result of growing lithium battery use globally, and specialized electronic and industrial products. Demand for jumbo flake size graphite is expected to experience the majority of growth in market demand and pricing. Gobi Coal is now in
the process of negotiating strategic equity investments into pre-production stage graphite mining companies in Africa.