Vancouver – West Hawk Development (WHD-V) has agreed to purchase ten high grade metallurgical coal properties comprising the Groundhog coalfield in the Bowser Basin of northwestern British Columbia for $9.02-million.
The company signed a definitive agreement for a 100% interest in the properties which encompass 57.5-sq. km of coal licence applications, situated 140 km northeast of Stewart. The properties are some 1,235 km by rail northeast of the Ridley Island coal terminal in Prince Rupert.
West Hawk has advanced Clive Brookes, the vendor, $10,000 and agreed to pay $115,000 within 30 days and issue 500,000 shares. Another $125,000 is due six months from signing with annual payments of $125,000 due commencing Nov. 1, 2006. The payments increase to $200,000 in 2009 and 2010 by which time West Hawk will have earned a 75% ownership.
The company can elect to purchase the remaining 25% for $5-million. An underlying mine gate, royalty payment of $1.50 per tonne is due annually and may be reduced to $1 per tonne for a $3-million advanced royalty payment.
Previous work on the property includes that of the Geological Survey of Canada in 1948. In 1977, BC Hydro defined a resource in an effort to identify a 50-million-ton reserve that would support a large thermal power generating station plant it was planning for at least 35 years.
BC Hydro defined a historic open pittable inferred resource of 46 million tons to 100-ft. depth in the Lower Discovery Creek area and another 290 million tons of inferred underground resources underlying the Discovery Creek-Evans Creek area.
Interest resumed in the 1980s when Gulf Resources and Suncor estimated an inferred resource at 1.538 billion tons.
The company is commissioning an independent review of all the historical data in order to define an inferred resource estimate compliant with NI43-101 guidelines.
The Groundhog coalfield has seen exploration activity off and on since it was discovered in 1900, however, its development depended on the construction of a railway.Canadian National Railway (CNR), which recently purchased British Columbia Rail (BCR), proposes to extend the track through the Groundhog project to access Fortune Minerals (FT-T) Mt. Klappan coal project, situated some 50 km to the north. Mt. Klappan is at the feasibility stage and is undergoing environmental permitting.
The ten properties lie near the BCR subgrade between Prince George and Dease Lake constructed during the 1970s, and the tracks run to within 30 km of the properties’ southern boundary.
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