NORTHERN Railways LLC has received its construction licence from the Mongolian Government for the Erdenet to Ovoot Railway. This is a precondition for start of negotiations with the government for granting of a long-term lease over the land on which the line will be built.

The licence also provides for Northern Railways to then enter into land use agreements with the local communities and allows for establishment of a commission comprising Northern Railways, the Ministry of Roads and Transport and Mongolia’s national railway operator UBTZ to agree traffic management protocols and the point at which the railway connects to the existing UBTZ network.

It follows the signing of a concession agreement with Northern Railways on September 3, 2015. Northern is the Mongolian rail infrastructure subsidiary of ASX-listed Aspire Mining.

The rail project will span 547km and forms part of Mongolia’s policy to provide rail access to northern provinces through extension of its existing rail network from Erdenet to the Russian/Mongolian border at Arts Suuri. The project will have capacity to annually move up to 30 million tonnes of bulk commodities, agricultural, general and passenger freight between Russia and China.

It will also provide access to Aspire’s world-class Ovoot Coking Coal Project, which is the second largest coking coal project by reserves in Mongolia as well as the Nuurstei Coking Coal Project 90% owned by the Ekhgoviin Chuluu Joint Venture (ECJV), in which Aspire owns 50% and is the operator while Noble Group holds the other 50%.

Meantime, non-core drilling completed by ECJV at Nuurstei has identified coal seams to a depth of 180 metres with the basement rock not yet intersected. The program began in July 2015 with 24 non-core drill holes and 19 PQ diamond core holes completed. The diamond holes provided coal for sampling and identified seams of potential economic interest.

Results indicate steeply dipping and banded seams with a large number of seams identified in the 150-180 metre deep holes. Historical drilling showed that coal in multiple thin seams was intersected well below the current level of drilling.

The best reported intersection was 6.94 metres from 61.2 metres with another strong intersection of 5.6 metres from 34.7 metres. Twelve other seams identified in the latter provided a total of 26.39 metres of coal from surface to 108 metres.

The strike length of correlated seams has been identified over 1.6km, up from 1.2km reported following completion of the 2014 exploration program.