June 4th, 2014 ~ Vol. 84 No. 22
Riversdale Resources updates the public
Crowsnest Pass Herald Front Page
source: Riversdale Resources website
Pass Herald Reporter
Anthony Martin, CFO of Riversdale Resources, is cautiously optimistic about the future of the metallurgical coal industry but says some companies will not survive the recent spate of low prices.
“In the medium term we do see [the price] coming back,” he says. “The reality is a lot of marginal projects won’t make it [but] we’re well funded and once we’ve got the feasibility study finished, we’ve got some very supportive shareholders.”
Martin says the market was oversupplied by about 10 per cent, which is roughly 30 million tons of coal.
The coal industry’s focus on increasing production drove the price down from a peak of about $300 U.S. per ton to its present value of $113 U.S. per ton.
He estimates that about 50 per cent of coal producers are losing money at this price and he expects many marginal players to close shop before the situation improves.
The good news is that about half of the original 30 million tons has been removed from the market and that the Chinese are buying an increasing amount of Canadian coal.
Over the last year Canada’s share of China’s seaborne coal increased from about 7 per cent to almost 15 per cent of their intake. China is itself a coal producing country, but Martin says imported product is about 50 dollars U.S. a ton cheaper than their domestic product.
Riversdale holds open house
Riversdale staff held an open house at the Coleman Arena on May 29 where it was announced the mine on Grassy Mountain is expected to enter production in late 2018.
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The Riversdale mine is expected to have a 25-year lifespan and would produce 2-4 million tons of coal per year. Peter Murray, operations manager with Riversdale, says a similar mine in his native Australia would employ around 200 people with about 5 to 7 times that number offsite.
“That includes contracting out catering services, trucking services, overburden removal, maintenance and safety,” he says.
Steve Mallyon, managing director, identified three main production seams at the proposed site and says the metallurgical coal would be destined for markets in Asia and both South and North America.
Mallyon also says contaminated water sitting in cavities from previous mining operations is one of the project’s main environmental concerns. He says there is a plan to contain this water to prevent it from running into the nearby Crowsnest River.
“[A] full project water model will be created to manage water flows on project areas,” says a company release.
Mallyon says the company will try and transport their product from Grassy Mountain by rail and has hired Northwest Consulting/Rail engineers to identify sites for a proposed rail loader.
The company has begun a feasibility study for the project, which is expected to be complete by the 3rd quarter of 2015. After the study is released, a permitting process should take anywhere from 12 to 24 months.
Riversdale is based in Sydney Australia and focuses on producing coal for the metallurgical industry. Their shareholders include Resource Capital Funds and Macquarie Bank Limited. The company is working on another mining operation near Chickaloon, Alaska.
They’ve completed a winter drilling program where they dug nine open holes and seven large diameter core holes, sending samples to labs in Calgary and Vancouver for analysis.
They are now preparing for a summer drilling program on the southern and northern portions of Grassy Mountain.
The proposed mine site sits within the Treaty 7 area of Alberta, which includes 5 First Nations: the Piikani, the Kainai, the Siksika, the Tsuu-Tina and the Stoney Nakoda.
June 4th ~ Vol. 84 No. 22
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