Cash Minerals considers coal project revival (June 16, 2008)

Now that coal’s back in style among investors, Cash Minerals (CHX-V, CHXMF-O) has decided to dust off a two-year-old feasibility study for its Division Mountain coal property in the Yukon.

The news sent Cash shares up 26%, or about 6, to 27 each on a trading volume of 11.5 million shares.

The feasibility study was completed in 2006, but concluded that the conditions at the time did not support mine development to serve the export market; since then, Cash has been focusing on developing its uranium properties.

Division Mountain hosts measured resources of 52.5 million tonnes of high-volatile “B” bituminous thermal coal. The 100%- owned property covers 7.7 sq. km of coal leases and 3,600 sq. km of territorial coal exploration licences.

The recent rise in coal prices prompted the company to review its assets in order to increase value for its shareholders.

Cash plans to update the feasibility study to determine the potential for export coal.

The company also plans to revise the study to look at the potential of a coal mine that would provide feedstock for a proposed mine-mouth power station that would be located next to the property — something the original feasibility suggested.

An exploration program is being planned to determine the potential for metallurgical coal on the property and to upgrade and expand the existing resource.

The original feasibility study looked at building an open-pit mine that would produce 240,000 tonnes of unwashed coal per year over a 20- year period.

The study on the mine-mouth power plant estimated the operating cost at 12.2 per kilowatt hour compared with Yukon Energy’s residential rate of 13.74 per kilowatt hour and the general service rate of 15.39 per kilowatt hour.