A positive NI 43-101 compliant, pre-feasibility study has been presented for QGX's Baruun Naran coal project in southern Mongolia.

The study, prepared by Minarco-MineConsult of Sydney, Australia, defines a conventional truck-and-shovel, open-cut mining operation with coal processed on site using a wash plant to produce both coking and thermal coal products. The coal products are assumed to be delivered to markets by rail starting in 2011.

The study concludes that the project is financially robust and projects 193 million tonnes of total mined coal and a mine life of 20 years. The initial capital cost is estimated at US$404 million.

QGX president and CEO Paul Zweng says: “We are pleased that the positive results of the Baruun Naran pre-feasibility study confirm and substantiate the findings of the preliminary economic assessment announced last July.

“The new study includes a more rigorous assessment of the capital costs required to build the coal operation. We take comfort in the knowledge that these capital costs have been well vetted by a series of mining experts with experience in Asia.

“As well, the study provides updated price forecasts on coking and thermal coal in the world’s greatest coal market - China. The demand for both coking and thermal coal in China continues to soar. Recent announcements by some of the world’s largest coal companies suggest that the prices for coking and thermal coal will settle at all-time highs this year.

“The fundamentals have never been better for putting a new coalfield into production and we remain very bullish on the outlook for this project.

The report is based on the recently completed geological model which identified 252.9 million tonnes of NI 43-101 compliant measured and indicated geological resources.

The initial construction phase involves site preparation, infrastructure construction, and waste pre-stripping and stockpiling of coal. Major infrastructure to be constructed on site includes a wash plant with a capacity of 10 million tonnes per annum, coal stockpiles and handling equipment, mine offices, equipment workshops, and a staff camp facility.

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