Mantle Mining has executed a non-binding Memorandum of Understanding (MOU) with Exergen for the development of its 100% owned Bacchus Marsh Brown Coal Project in Victoria, Australia. Mantle has recently been granted priority over an application for Exploration Licence EL 5294 at Bacchus Marsh in Victoria. Mantle is of the view that EL 5294 could contain an Exploration Target1, 2 of between 1,000 and 2,000 Mt of brown coal. Exergen has developed a breakthrough clean coal technology that, teamed with modern coal-fired power station technology, will deliver up to 40% emissions reductions.
The technology is known as Continuous Hydrothermal Dewatering (CHTD). Exergen’s cornerstone investors include TATA Power, India’s largest private power utility, as major coal off-taker; Thiess (Leighton), one of the world’s largest supplier of outsourced mining services; Itochu, Japan’s third largest trading house with extensive coal trading experience and Sedgman, a global specialist provider of mineral engineering solutions.
Mantle and Exergen are to formalise agreements leading to a 50/50 Joint Venture for exploration and subsequent mine development. Exergen will construct a 50 t/h demonstration drying facility and will develop an export project on its 50% of the coal deposit. Mantle is being licenced to use CHTD on its 50% of the coal deposit.
Mantle and Exergen are to execute binding “Substantive Agreements”
- An exploration Joint Venture Agreement (JVA), within 1 year
- A CHTD Technology Licence Agreement (TLA), within 1 year
- Mine Development Heads of Agreement (HOA), within 1 year
- Finalising the Mine Development Agreement (MDA), within 2 years.
Proposed major developments over subsequent years to include:
- Commencing the drying demonstrator construction
- Full demonstration and taking an investment decision
- Commencing construction of Exergen’s Export Project.
Ian Kraemer, Mantle’s MD: “The signing of this MOU with Exergen is an extremely exciting step for Mantle. It underscores the company’s capability to generate shareholder value by focussing on projects containing known deposits in key commodity sectors. The company is continuing to explore development options for its other core gold and coal/CBM tenements, with a number of business development activities under consideration. Exergen has developed and proven a breakthrough clean-coal technology that promises to contribute to global energy security by reducing emissions from upgraded brown coal fired power generation. CHTD is a significant step towards overcoming the social and economic challenges posed by many nations’ continued reliance on subbituminous coals for energy production.
“The relationship with Exergen is seen as a first step by Mantle in implementing its exploration and development strategy for coal. The strategy involves harnessing upside from commercialisation of leading edge, socioeconomically acceptable, energy resource development. Mantle recognises that coal and other hydrocarbon energy resources will continue to be utilised in the future due to their availability and to the rapid growth in energy demand from (especially) China and India. However, their use will move more towards extraction of the pure Hydrogen energy component, with a parallel reduction in the impact of the extraction process. This is where Mantle sees positioning itself to best capture the commercial benefits, and reduce the political risks, from developments in the coal sector going forward.”
“As shareholders are aware, prior to assuming the role of MD of Mantle I held the position of Project Manager responsible for development of Exergen, seconded from Thiess and reporting to the Chairman of Thiess and the Board of Exergen. During that time I developed a knowledge and belief in the technical and commercial robustness the Exergen CHTD technology, and having reviewed this opportunity for its applicability and suitability for this project with Mantle I am excited at the potential for both companies.”
Mantle’s Bacchus Marsh brown coal project is located in the northern extremity of Victoria’s Otway basin, specifically the northwest tip of the Parwan sub-basin at Bacchus Marsh. The project is 120 km west of Melbourne and benefits from excellent levels of pre-existing infrastructure with roads, rail, power and a gas pipeline all running through the tenement. The area contains a large, historically mined deposit of brown coal of a quality apparently similar to, or better than, the coals found in Victoria’s Latrobe Valley. The region has been the subject of small scale, historic, coal mining since World War 2 when both surface and underground mining methods were used. A small amount of shallow, sub-crop, coal is currently mined at the Maddingley open cut. Increased energy demand over recent years has meant a rebound in coal pricing. The advent of more efficient mining methods and coal upgrade technologies (as being introduced in the Latrobe Valley) mean that previously uneconomic strip ratios and moisture contents are becoming a less limiting commercial factor. Based on review of historic holes, including some drilled by CRA in the mid 1980s, Mantle is of the view that EL 5294 could contain an exploration target of between 1,000 and 2,000 Mt of brown coal. Drill logs show that coal quality compares favourably with other coals in Victoria, including the Latrobe Valley, and Western Australia as relates moisture, ash and strip ratio.