Hillsborough expands into coking coal

Vancouver — Thermal coal producer Hillsborough Resources (hlb-t) has started drilling at its Five Cabin property, southwest of Tumbler Ridge, B.C.

The Vancouver-based company recently acquired 11 properties covering 400 sq. km in the Tumbler Ridge coal district. Most contain coking coal, except for the Wapiti property, which contains thermal coal.

Hillsborough President David Slater says the acquisition gives the company a major position in the Northeast coal district, as well as “the opportunity to become a major coking coal producer.”

He adds that the company has already held meetings with “major international companies” interested in developing the properties and marketing the coal. The discussions are ongoing.

Hillsborough produces thermal coal at its Quinsam mine near Campbell River, B.C., and is advancing toward production at the Crossville underground thermal coal mine in Tennessee. The company is also applying for a small-mine permit for its Bingay surface coal project in the Elk Valley of southeastern British Columbia.

As a first step to acquiring the 11 coal properties, Hillsborough paid $300,000 for the Murray River group of properties (and two additional properties known as Ressor and Mesa), plus $100,000 for the Wapiti, Bickford and Bullmoose properties. Additional payments in cash and shares are required in stages as the properties are explored and brought into production. The vendor retains a 1% mine-gate royalty for all 11 properties.

Hillsborough is focusing its initial efforts at the Five Cabin syncline, part of the Murray River group of properties. Five Cabin was explored by Denison Mines in the 1970s, and is 15 km southwest of Denison’s now-closed Quintette coal mine.

Denison’s assessment reports filed with the government show a resource estimate of 450 million tonnes of coal in the Gates Formation and 160 million tonnes in the Gething Formation. These estimates are based on a cumulative coal-seam thickness of 15.2 metres in the Gates Formation and 4.6 metres in the Gething Formation.

Crowsnest Resources explored the property during the 1980s and confirmed Denison’s resource estimates.

Hillsborough’s exploration and drilling programs are designed to bring the historical estimates into compliance with National Instrument 43-101. The first step is to define an initial resource amenable to open-pit mining by June of this year. Follow-up drilling and sampling will try to delineate a larger resource in the total deposit area.

Three of the five remaining Murray Group properties have coal resources that, if confirmed, could be processed at the centrally located Five Cabin wash plant. Two properties are considered good exploration prospects. A summer program of mapping and drilling will endeavour to outline major structures and identify resource blocks for ongoing work programs.

— The author is a former editor of The Northern Miner and currently works as a freelance writer in Vancouver.