London, Ontario-based junior Fortune Minerals (FT-T) has agreed to buy the Mount Klappan anthracite coal deposits about 150 km northeast of Stewart, British Columbia, from Conoco Canada Resources, an indirect subsidiary of Huston-based Conoco (COC-N) for $3 million.
The property is host to four deposits – Lost-Fox, Hobbit-Broach, Summit and Nass, with measured and indicated resources totalling 260 million tonnes plus inferred and speculative resources of 2.5 billion tonnes.
A 1991 feasibility study pegged in-pit proven and probable reserves at Lost-Fox at 51.5 million tonnes of high quality anthracite. Nearly 80% of the reserve is classified as proven.
The study envisaged annual production at 1.7 million tonnes of anthracite products over a 21-year period. Engineering and processing studies indicate that washing and heavy media separation of the anthracite produces products with high calorific values, which are low in sulphur, moisture and volatiles.
For its $3 million, Fortune gets the150-sq.-km Mount Klappan Coal holding lease and a technical database. Conoco will also be reimbursed the remaining pro rata part of the annual lease rental, and Fortune will be responsible for replacing a $210,000 reclamation bond for roads constructed at the site. Conoco will also retain a royalty of $1 per tonne of anthracite produced from the property.
Fortune has paid a $150,000 deposit toward the purchase. Completion is subject to regulatory approvals and a 60-day due-diligence period.
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