Atrum Coal was established in 2012 to explore and develop high potential metallurgical coal projects in Canada for the export markets. The ASX-listed firm’s initial focus was on the Groundhog and Panorama projects in British Columbia, which together hold more than one billion tonnes of high and ultra-high grade anthracite JORC (Joint Ore Reserves Committee) classified resources. After providing several years of exploration funding via a farm-in agreement, Japan Oil, Gas and Metals National Corporation (JOGMEC) now owns a 35% joint venture equity interest in the Panorama North project, which holds 174 million tonnes (Mt) of inferred JORC resources. However, Atrum’s current focus is on the accelerated exploration and development of the Elan Hard Coking Coal (HCC) project in Southern Alberta.
Atrum first acquired an interest in Elan back in 2014 by way of a joint venture agreement that allowed the company to earn up to a 70% interest in the Elan properties. In late 2016, global coking coal markets experienced renewed strength which facilitated discussions with the project’s vendors on the best way to develop the Elan properties.
The result of those discussions was an agreement in 2017 for Atrum to acquire a 100% interest in Elan. At around the same time, Atrum revamped its board with the additions of Charles Fear, George Edwards and Charles Blixt – the latter being appointed chairman. More recently, Richard Barker joined the board at the start of this year.
“Each of these non-executive directors has brought outstanding credentials along with substantial and highly relevant experience to our board,” says Atrum’s managing director and CEO Max Wang.
Wang was appointed to the role in 2017 and brings a strong background in metallurgical coal mining and global coal markets, as well as extensive experience in major project engineering and development in Canada.
The tenements at Elan, especially those in the Northern areas such as Isolation South, have been subject to five decades of historical exploration, starting in the early 1950s. This work included more than 220 drill holes (mostly cored and geophysically logged) and a significant number of trenches, adits and other field exploration work.
Extensive coking coal quality testing had also been conducted on samples extracted from different locations in order to confirm Tier 1 hard coking properties. All historical exploration and coal quality testing data was subsequently acquired by Atrum.
“In 2014, under the original JV earn-in arrangement, Atrum funded a successful field exploration programme to drill a number of holes and extracted coal samples at Elan South. This work confirmed the existence of a thick shallow coal deposit with potential Tier 1 HCC quality at Elan South.”
Last year, Atrum conducted extensive drilling programmes which were successful in delineating an initial 298 Mt JORC resource at the Elan project, confirming its status as a Tier 1 HCC asset.
Subsequent coal testing programmes also established the Tier 1 quality of the HCC at Elan. “Based on our extensive testing on core samples from two Elan South locations in 2018, the clean coal demonstrates Tier 1 medium volatile (mid vol) HCC characteristics closely resembling Teck’s premium products and Riversdale’s Grassy Mountain product,” Wang reveals.
The Elan project is just 30 km east of Teck Resources’ Elk Valley – the beating heart of Canada’s HCC industry with 25 Mt produced across the sprawling complex per annum. Furthermore, the project is bordered to the South by the Grassy Mountain HCC project, owned by Riversdale Resources.
These existing facilities form part of a mining and infrastructure hub in the Crowsnest Pass region of Alberta, which will play a critical role in the development of Atrum’s flagship project.
“In comparison with Teck’s Elk Valley, the Elan deposits have comparable coal quality, comparable geology, comparable access to infrastructure and a combined comparable land base that could support a similarly scalable, multi-mine operation.
“The project enjoys close proximity to a high capacity rail line with surplus capacity that can deliver to several deep-water ports on Canada’s West coast. This major Canadian Pacific rail line passes through Blairmore and Coleman, which are located only 13 km south of our Elan South development area.
“Our Elan properties also enjoy direct road access from a combination of provincial highways and private access roads developed by the resource and forestry industry in the region,” notes Wang.
The immediate focus
Atrum’s immediate focus will remain on the Elan South section of the tenements, which currently accounts for 97 Mt of the total JORC resource (before the 2019 exploration results update), with the larger Elan North area earmarked as the next leg of the project.
After securing AUS$20 million in new equity financing earlier this year, the firm commenced an accelerated exploration drilling programmes at Elan, completing over 100 holes by the end of September. These campaigns have led to several new discoveries, including some ‘outstanding’ results from initial drilling at the South East Corner of the project.
“On the exploration side, we will continue with our 2019 drilling programme targeted at growing and upgrading the existing classification of our resource base at Elan South and Isolation South. We expect to complete updated resource estimates on in the final quarter of the year.”
Concurrently, Atrum targets the completion of a scoping study for Atrum South before the end of 2019 which would then feed into a pre-feasibility study that would be published in the second half of next year.
An expanded coal quality testing programme over the next several months is also set to further validate the Tier 1 HCC properties of the Elan project, and will help develop an indicative product specification for Elan South. Comprehensive final coal quality results are expected in the first half of 2020.
“Finally, the next six to 12 months will see us continuing to undertake our early engagement programmes with stakeholders, including traditional land use studies by the First Nations,” says Wang. “We have also started a comprehensive programme to collect the full-scope baseline environmental data required for environmental impact assessment (EIA) and project permitting at Elan South.”
The next leg
Elan North is Atrum’s next major focus in the Crowsnest Pass and is a larger tenement area with a defined JORC resource of 201 Mt. The current primary area of Elan North is referred to as Isolation South, which holds an existing JORC resource of 120 Mt.
There is already an exploration programme underway at Isolation South which is aimed at expanding and upgrading the classification of the existing resource estimate. New core samples are also planned to be extracted for further coal quality testing.
“The Isolation South deposit is attractive in that it possesses relatively simple geological and geometrical settings for potentially very efficient open-cut mining. Atrum’s strategy is to rapidly advance Isolation South, alongside Elan South, as two world-class Tier 1 HCC developments at Elan.”
Over the last 18 months, Atrum has rapidly demonstrated the scale and quality of the Elan HCC project through a series of exploration campaigns and test work at the Elan South and Isolation South Areas.
“Shallow, large-scale, Tier 1 quality hard coking coal deposits located in a first-class mining jurisdiction and proximate to critical export rail infrastructure with surplus capacity represents a rare asset of substantial value. The 2019 field programme at Elan is aimed at rapidly unlocking the potential of this asset.