2012-11-15 20:05:52 -
CALGARY, ALBERTA -- (Marketwire) -- 11/15/12 -- Cobalt Coal Ltd (TSX VENTURE:CCF) ("Cobalt" or the "Corporation") announces the completion of an updated technical report that evaluates the coal resources on Cobalt's Westchester Expansion Lease ("WEL") and updates the existing technical report pertaining to Cobalt's original Westchester Mine leases ("WM").
As disclosed in Cobalt's news releases dated April 4, 2012 and April 17, 2012, the signing of the WEL resulted in a material increase to the coal resources attributable to Cobalt therefore triggering the necessity, pursuant to the policies of National Instrument 43-101, to engage a qualified person to prepare a technical report on the WEL.
As disclosed in Cobalt's October 11, 2012 news release regarding the placing of a cease trade order against the securities of Cobalt by the Alberta Securities ("ASC"), the ASC determined that the contiguous nature of the WM and the WEL and the fact that the WEL will be accessed from Cobalt's existing Westchester mine portals also necessitated the requirement to update the 2009 Westchester Technical Report prepared by Norwest Corporation ("Norwest") dated June 8, 2009 (the "2009 Norwest Report").
The qualified person for purposes of NI 43-101 responsible for the preparation of the updated technical report is Terence Walker, M. Sc. P. Geo. The report was prepared in accordance with National Instrument 43-101 Standards of Disclosure for Mineral Projects ("NI 43-101") and is dated September 27, 2012 (the "Updated Westchester Technical Report"). Mr. Walker has reviewed the contents of this news release.
The following is a summary of the coal resources identified in the Updated Westchester Technical Report:
COAL RESOURCES SUMMARY
In-Place Underground Clean Coal Resources (Tons)
Total Measured Additional
STM Group Measured Indicated & Indicated Inferred
Bituminous 1,757,300 - 1,757,300 -
The Coal Resources estimated above are situated on 898.6 total acres comprising 777.6 acres of the "North Block" and the "South Block" of the original Westchester Mine leases together with the 121 acre Westchester Expansion Lease. The leases are contiguous to each other in that they share a common boundary. The quantity of coal resources have been adjusted for all coal volumes produced by Cobalt until the date of the Updated Westchester Technical Report.
The following information is extracted from the Updated Westchester Technical Report which is NI 43-101 compliant. A full text version of the Updated Westchester Technical Report has been filed on SEDAR and is available at www.sedar.com.
Mr. Walker used the Canadian Institute of Mining, Metallurgy and Petroleum ("CIM") Definition Standards on Mineral Resources and Reserves ("CIM Definitions") adopted by the CIM Council on November 27, 2010 during the classification, estimation and reporting of mineral resources.
Mr. Walker conducted a physical inspection of the WEL and WM in advance of the preparation of the Updated Westchester Technical Report.
Basis of Presentation
The majority of the data reviewed to establish seam thickness and elevation has been obtained from the active Westchester Mine and historical mining records from currently abandoned underground mines. A total of ninety one structure control points and seventy one seam thickness points were obtained from the mine data and analyzed for purposes of estimating seam thickness and seam elevation. In addition to previous mining records, surface outcrop data has been reviewed and surface drilling and core data has been used to augment the geological and mining data. Information from a total of five exploration drill holes was reviewed during the evaluation.
Coal samples from the drill holes were analysed by different independent coal testing laboratories for an extensive suite of coal quality parameters. The average values and significant ranges for the more important parameters are:
-- The dry basis clean coal Ash averages 4.9 wt. %;
-- The Ash Fusion Temperature is high;
-- The Free Swelling Index ranges from 8.5 to 9; and
-- The volatile matter (VM cc DB) ranges from 19.78 wt. % to 20.74 wt. %.
This coal quality data supports the conclusion that the Coal Resources reported in the Updated Westchester Technical Report may be classified as metallurgical in nature.
The Updated Westchester Technical Report identifies the existence of Metallurgical Coal Resources on the WL and the WEL in the Sewell seam which has been historically proven to be high quality metallurgical coal. Volumes were estimated in accordance with the methodology of GSC Paper 88-21.
2009 Norwest Report Update
The Updated Westchester Technical Report updates the coal resource volumes reported in the 2009 Norwest Report, adjusted for production until the date of the report.
In addition to providing a resource estimate, the 2009 Norwest Report included an estimation of reserves. Mr. Walker noted in his report that economic changes had occurred since the date of the 2009 Norwest Report. Additionally, changes in the seam model had occurred as a result of actual results achieved from mining operations conducted subsequent to the date of the 2009 Norwest Report. Mr. Walker therefore concluded no reserves estimates could be confidently stated on any of the resource areas until a complete mining feasibility study is conducted. Therefore, the scope of the Updated Westchester Technical Report was limited to a resource determination.
Recommendations of the Updated Westchester Technical Report
Mr Walker recommended that Cobalt commission a new economic and mining study of both the WEL and WM to allow quantification of coal reserves. Mr Walker also recommended that Cobalt continue to regularly review coal seam data, perform geotechnical testing with a view to updating the geological database and mining model as required, in support of preparing the new economic and mining study.
Cobalt is a publicly traded coal exploration and production company headquartered in Calgary, Alberta, Canada with a regional office in Welch, West Virginia USA. Cobalt was created to capitalize on the growth opportunities that exist in the metallurgical coal mining industry.
Statements in this News Release may constitute "forward-looking" statements and "forward-looking" information (collectively, "forward-looking statements") as defined in applicable securities laws, which involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Corporation, or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Forward-looking statements may include, but are not limited to, statements regarding the quantity or quality of mineral deposits.
In certain cases, forward-looking statements can be identified by the use of such words as "may", "would", "could", "will", "intend", "expect", "believe", "plan", "anticipate", "estimate", "should", "provide" and other similar terminology. These statements reflect the Corporation's current expectations regarding future events and operating performance and speak only as of the date of this News Release. Forward-looking statements are not a guarantee of future performance and involve known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking statements.
Forward-looking statements involve significant risks and uncertainties, should not be read as guarantees of future performance or results, and will not necessarily be accurate indications of whether or not such results will be achieved. Although the forward-looking statements contained in this News Release are based upon what management of the Corporation believes are reasonable assumptions, the Corporation cannot assure investors that actual results will be consistent with these forward-looking statements. These forward-looking statements are made as of the date of this News Release and are expressly qualified in their entirety by this cautionary statement. Subject to applicable securities laws, the Corporation assumes no obligation to update or revise them to reflect new events or circumstances.
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
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