ASPIRE Mining believes A$16.5 million raised in a fully underwritten rights issue will enable it to expedite development of the Nuurstei Coking Coal Project. The company aims to put the 90%-owned project into production within 18 months.

The next step is a $2 million drilling and exploration program, with the aim of increasing resources and establishing a reserve, including conversion of inferred resources to the indicated category. A new resource model is expected to be completed during the current quarter.

Capital costs for development have been further refined, with the revised estimate of US$13 million to US$14 million to be confirmed in a feasibility study.

The studies aim to confirm an economically viable mining operation commencing within 18 months dependent on analysis of drilling results, future positive economic studies, granting of necessary approvals and licences, and any further required funding in addition to but not limited to that provided by other possible sources, such as coal pre-sales, contractor funding and exercise of options.

While the project can commence as a road-based production operation, access to the proposed Erdenet to Ovoot Railway provides the potential for further reduced transport costs.

Noble Group took part in the rights issue and has subsequently increased its interest in the company to 19.9%. Supplemented by an A$190,000 payment to Noble from the funds, Aspire has reduced its debt to Noble by A$3.75 million. This completes the first of a series of transactions designed to reduce the US$6.65 million debt owing under the Noble debt facility to US$1.8 million.

Aspire’s managing director David Paull said, “The underwriting was supported by a strong panel of institutional sub-underwriters seeking to position themselves as shareholders and we welcome them in that capacity. Our focus is now squarely on confirming the feasibility and commencing development of Nuurstei.”

In October 2016, the company received a mining licence covering 860.91 hectares of the project and providing Aspire with a minimum 30 year tenure over the area.

David Paull said, “This vindicates our decision in June 2014 to look to add a new coking coal project which is not rail dependent and the decision in July 2017 to exercise our option to move to a 90% interest.”