Huguenot Property 2020 PEA Highlights
Company Overview: Colonial Coal
HUGUENOT PROPERTY
2020 PEA Highlights (Open Pit Only)
■ The 2020 study used previously reported surface mineable resources to
develop a revised conceptual mine plan utilizing a stand-alone open pit.
A more detailed analysis of the open pit design and equipment selection
was carried out, that yielded larger mineable open pit tonnage, longer
mine life, and a lower cost mining operation.
■ Alternative means of product coal transportation were considered which
resulted in a revised plan to transport coal by conventional haul trucks
from the mine to the existing rail line south of Tumbler Ridge, as opposed
to the previous concept of direct rail transport from the mine.
Huguenot Project
CIC
NPV (millions) at Varying Discount Rates with IRR
PEA 2020
Coal
Price/Tonne
PURCHASED EQUIPMENT SCENARIO
5%
7.5%
10%
IRR%
$1,482
$1,027
$718
26.30%
CAD$224
$1,949
$1,351
$944
26.30%
US$174
The capital expenditures are based on two scenarios.
■ The trucking concept has the advantage of lower capital costs, lower risk,
and a shorter construction schedule than the rail option.
PEA 2020
LEASED EQUIPMENT SCENARIO
Coal
Price/Tonne
5%
7.5%
10%
IRR%
US$174
$1,474
$1,032
$732
29.40%
CAD$224
$1,939
$1,357
$963
29.40%
The first scenario assumes that all major mining equipment is
purchased outright in the year in which it is required for the mining
operation. This includes replacements as they are required over the
life of the mine.
The second scenario assumes that the major mining equipment will be
leased in the year in which it is required for the mining operation and
that replacements will also be leased when the equipment needs to be
replaced.
**
All costs are in US dollars but, where Canadian dollar
equivalents are provided, they have been converted using
an exchange rate of US$1.00 equals CAD$1.316
Based on the purchased equipment scenario the financial analysis suggests that the coal price required to achieve a zero NPV at
discount rates of 5%, 7.5%, and 10%, respectively, is about US$113, US$120 and US$125 per tonne. A coal price of US$137 per
tonne is required for an IRR of 15%.
Based on the leased equipment option the financial analysis suggests that the coal price required to achieve a zero NPV at discount
rates of 5%, 7.5%, and 10%, respectively, is about US$114, US$119 and US$125 per tonne. A coal price of US$137 per tonne is
required for an IRR of 15%.
TSX-V: CAD
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