Cline aims for 2007 start at Lodgepole and Lossan

Vancouver – Based on a newly completed feasibility study, Cline Mining (CMK-T) estimates it will cost US$154.8 million to build the Lodgepole coal mine in the Crowsnest coal district of southeastern British Columbia.

The independent study was based on projected production of 2 million tonnes of salable, low-volume bituminous pulverized coal injection (PCI) coal over a 20-year mine life.

The report also placed total measured and indicated coal resources at 154.5 million tonnes, plus total inferred resources of 3.2 million tonnes. Proven and probable reserves total 40.5 million tonnes, with the bulk of this in the proven category.

The waste-to-coal strip ratio is estimated at 5.8:1 during the first five years of operation, rising to an average of 8 bank cubic metres of waste to one tonne of clean coal over the 20-year period.

The permitting process for the project is advancing, subject to regulatory approvals and coal-sales contracts. If all goes as planned, the company hopes to begin mine construction in early 2007, followed by plant commissioning later that year.

The study examined the economics of the proposed mine and estimated a pre-tax internal rate of return on the invested capital of 29.6%, subject to various price and other sensitivities, and a pre-tax net present value of $274.5 million. These projections are based on an average price of US$85 per tonne of product PCI coal.

Cline has other coal projects, including the Lossan project in the Peace River district of northeastern British Columbia. A feasibility study was recently completed that examines the production of 1 million tonnes of salable medium volatile bituminous PCI and metallurgical coking over a 14-year mine life.

The project hosts total measured and indicated coal resources of 186.1 million tonnes and total inferred resources of 53.5 million tonnes. Proven and probable reserves at Lossan total 13.93 million tonnes. Capital costs are estimated at US$57 million, with construction and commissioning planned for 2007, subject to coal-price contracts and permitting approvals.