Vancouver – Investors took a shine to Gulfside Minerals‘ (GMG-V, GMGLF-O) plans to acquire the Monster coal project in southwestern Mongolia, boosting the company’s share price by 26% in June 22nd trading.
Gulfside has inked a letter of intent with a private Mongolian company to acquire up to a 66%-interest in the lease and to become operator.
Initial work on the Monster property, so named in that the coal seams are up to 100 metres thick in sections, dates back to Russian exploration in the early-1960s and additional work in the mid-1980s.
Last year the current leaseholder drilled a number of holes on the project identifying four coal seams with a cumulative thickness ranging from 41.5-94.9 metres. Further drilling discovered even thicker seams of up to 129.3 metres.
Local historical estimates (non-NI43-101 compliant) peg upwards of 500-million tonnes of Mongolian C category coal on the ground within a larger block potentially containing up to 2.5 billion tonnes of coal. Gulfside plans drilling this summer to allow for a compliant resource estimate on Monster.
Thermal coal being mined from the area reportedly sells from $20-40 per tonne.
Gulfside likes the infrastructure potential of the project being about 200 km from the Chinese border, within 82 km of a railway and six km from power lines.
Terms of Gulfsides acquisition agreement also table a 3-5% sliding scale production royalty.
Shares of the company closed up 24 on the news to $1.16 apiece.
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