EastCoal Inc.: Technical Report on Menzhinsky Coal Mine
VANCOUVER, BRITISH COLUMBIA -- (Marketwire) -- 03/12/12 -- EastCoal Inc. (TSX VENTURE: ECX) (the 'Company' or 'EastCoal') is pleased to announce that it will be filing a NI 43-101 compliant technical report titled 'Technical Report of the Menzhinsky Coal Mine, Lugansk Oblast, Ukraine' dated February 29, 2012' on the Menzhinsky Mine located in Ukraine (the 'Menzhinsky Mine' or the 'Mine') by March 15, 2012. The Company announced on September 28, 2011 that it had entered into a letter of intent with Aponet Enterprises Ltd. ('Aponet') under which EastCoal acquired the right to purchase a 100% interest in the Menzhinsky Mine provided the transaction close by March 31, 2012.
The report, prepared by Wardell Armstrong International Limited of the United Kingdom, concludes that the proposed expansion of the mine and tip washing operation has a net present value ('NPV') of US$316 million using a discount rate of 10% over the 12-year period. The estimated average operating cost per saleable tonne used in the technical report is US$75 and the technical report estimates that positive cash flows will be achieved within two years.
The Wardell report also concludes that the tip operation will process 6,750,000 tonnes of waste material at a cost of US$6 per tonne and yield 641,250 tonnes of coal generating net cash flows of US$38 million in the first five years of operation.
A table of JORC code compliant coal reserves and coal resources is set out below:
Coal Reserves Coal Resources(1)
Seam (Mt) (Mt)
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Proved Probable Measured Indicated Total
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I8H 1.3 0.9 1.8 9.9 11.7
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I6 1.7 3.0 3.5 10.8 14.3
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I4 1.3 2.1 1.0 13.8 14.8
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Total 4.3 6.0 6.3 34.4 40.7
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(1) Coal Resources are inclusive of Coal Reserves
The Company has previously filed reports on the Verticalnaya coal mine in Ukraine, the latest report prepared by IMC Group Consulting Ltd of the United Kingdom. This report concluded that the project has a NPV of US$615 million, at a discount rate of 10% and the estimated average operating cost per saleable tonne is US$38.41.
The Chairman of EastCoal, Mr. John Byrne, commented:
'The encouraging piece of the latest technical report is that the Company can boost coal production and generate significant cash flows from washing waste material adjacent to the mine. We are looking at putting the wash plant that was built for Verticalnaya at Menzhinsky and this could be up and running within the next four months.'
This report will be available on SEDAR (www.sedar.com) and the Company's website (www.eastcoal.ca). The technical content of this news release has been reviewed and approved by Colin Stocks, a Qualified Person as defined by National Instrument 43-101 who is the Technical Director of the Company.
By Order of the Board,
John Byrne, Chairman
About EastCoal Inc.
EastCoal Inc. is currently developing its 100% owned Verticalnaya anthracite mine.
This press release contains projections and forward-looking information that involve various risks and uncertainties regarding future events. Such forward-looking information can include without limitation statements based on current expectations involving a number of risks and uncertainties and are not guarantees of future performance. There are numerous risks and uncertainties that could cause actual results to differ materially from those expressed in the forward-looking information. These and all subsequent written and oral forward-looking information are based on estimates and opinions on the dates they are made and are expressly qualified in their entirety by this notice. Except as required by law, EastCoal assumes no obligation to update forward-looking information should circumstances or management's estimates or opinions change. Completion of the transaction described herein will be subject to numerous conditions, including the negotiation and execution of definitive agreements. There can be no assurance that the transaction will be completed as proposed or at all.
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.
Contacts:
EastCoal Inc.
John Byrne
Chairman
604-681-8069
604-685-4675 (FAX)
www.eastcoal.ca
