Colonial Coal Annou Nces Results of up-Dated Preliminary Economic Assessment FOR Its Huguenot Project
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COLONIAL COAL INTERNATIONAL CORP.
Suite 200 -595 Howe Street, Vancouver, British Columbia, Canada, V6C 2T5
Telephone: (604) 568-4962
PRESS RELEASE
COLONIAL COAL ANNOU NCES RESULTS OF UP-DATED PRELIMINARY
ECONOMIC ASSESSMENT FOR ITS HUGUENOT PROJECT
Vancouver, B.C., Canada – July 10, 2018 – Colonial Coal International Corp. (TSX-V: CAD) (the
“Company” or “ Colonial Coal ”). David Austin, Colonial Coal’s President and CEO, is pleased to
announce the results of a recently up-dated Preliminary Economic Assessment (the “ PEA”) for the
Company’s 100% owned Huguenot hard coking coal project (the “ Huguenot Project”) located
approximately 85 kilometres southeast of Tumbler Ridge in northeast British Columbia.
The original PEA report was prepared in 2013 by Norwest Corporation (“ Norwest”) and the results were
the subject of a news release dated September 24, 20 13. The up-dated PEA report, prepared by Norwest
now Stantec Consulting Services Inc. (“ Stantec”) in accordance with CSA National Instrument 43-101
(“NI 43-101”) standards, will be completed and filed on SEDAR (the System for Electronic Document
Analysis and Retrieval) within 45 days. The results of the up-dated PEA show that the Huguenot Project
continues to demonstrate positive economics, and th at it is worthy of continued exploration and
development.
In summary, Stantec used previously reported (2013), in situ, and potentially mineable resources plus the
2013 conceptual mine plan to exploit the coal resources through a combination of open pit and
underground mining, and up-dated sco ping-level cost estimates and economic analyses for the Huguenot
Project.
Highlights of the up-dated PEA report respecting th e Huguenot Project are summarized as below. 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$1.30.
The Huguenot Project has an indicative after-tax (and royalty) net present value (“NPV”)
of US$1,166 million (CAD$1,516 million), using a 7.5% discount rate, and an IRR of
33%, based on a coal price of US$172.00 per tonne.
The financial analysis suggests that the “br eak-even” price is less than US$116, US$120,
and US$125 per tonne for discount rates of 5%, 7.5% and 10%, respectively. It also
indicates that for a 15% IRR, a minimum coal price of US$135 would be required.
The Huguenot Project has a total projected mine life of 31 years, with the open pit (Years
1 - 14) and underground (Years 3 - 31) operating simultaneously during Years 3 - 14.
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Measured and indicated in-situ coal res ources total 277.7 million tonnes (132.0 million
tonnes surface mineable plus 145.7 milli on tonnes underground mineable). Inferred
resources total an additional 119.2 million tonn es (0.5 million tonnes of surface mineable
plus 118.7 million tonnes underground mineable).
The Huguenot Project’s potential coal production is identified as hard coking coal similar
to coking coal currently exported from northeast British Columbia.
The base coal price, of US$172.00 per tonne, used for the study represents a discount of
US$13.00 per tonne from a projected long-te rm benchmark price of US$185 per tonne
for premium low volatile hard coking coal.
The PEA economic analysis is based on a con ceptual open pit mine plan targeting 56
million run-of-mine (“ ROM”) tonnes of resource at an average stripping ratio of 8.6 :1
(bank cubic metres (bcm) :ROM tonnes) plus a conceptual underground mine plan that
targets an additional 66 million ROM tonnes of resource.
The Huguenot Project has total projected clean coal production of 89 million tonnes over
a mine life of 31 years.
Projected clean coal production from combined surface and underground mining
operations ranges from 1.4 million tonnes per annum (“ Mt/a”) to 5.9 Mt/a, averaging
approximately 3.0 Mt/a.
Projected clean coal production from the open pit averages approximately 3.2 Mt/a in
Years 1 through 12 and 1.8 Mt/a from underground from Years 5 through 31.
The Huguenot Project’s proposed payback of initial capital is estimated within 5 years
from start-up of operations.
The Huguenot Project’s cash operating costs are estimated at US$67.20 per tonne clean
coal at the mine loadout.
The Huguenot Project’s estimated direct plus offsite costs (ie, FOB cost), total US$95.50
per clean tonne (excluding production taxes and royalties).
Included in the up-dated PEA are previously disclosed NI 43-101 compliant resource estimates originally
reported by Norwest in September, 2013. These resource estimates are tabulated below:
Deposit type Measured (Mt) Indicated (Mt) Inferred (Mt)
Surface 96.2 35.75 0.53
Underground 18.85 126.88 118.66
TOTAL 115.05 162.63 119.19
Conceptual mine plans developed in the study utili ze surface mining for the steeper dipping sections of
the North, Middle and South resource blocks, while the shallower dipping portions of the North Block
below the economic limits of the open pit were c onceived as being mineable by underground longwall
mining techniques. Coal resources accounted for in both the open pit and underground mine plans were
estimated as:
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Mining Method ROM (Mt) Clean (Mt)
Open Pit 56 39
Underground 66 50
TOTAL 122 89
It was assumed that the Huguenot Project would be connected by rail to the existing rail line south of
Tumbler Ridge, and that a third party would construc t this rail link, with costs being charged to the
Huguenot Project on an annual basis. It was furthe r assumed that other potential projects along that
extended rail corridor would come on stream during th e same general time frame as the Huguenot Project
and that the rail costs would be shar ed among several users, such that th e Huguenot Project’s share of the
annual costs would be no more than 50% of the total (equivalent to US$4.59/clean tonne over the first 15
years, or US$2.91/clean tonne over life-of-mine (“LOM”).
The initial capital costs of the Huguenot Project have been significantly reduced by assuming that major
equipment items for surface mining would be leased, and are therefore included as cash operating costs.
Pre-production capital cost for the proposed mine is estimated at US$661 million, with additional
sustaining capital of US$178 million over the LOM.
A summary of the financial analyses is shown in the following tables:
Coal Price NPV (US$M) at Varying Discount Rates with
5% 7.5% 10% IRR (%)
US$172/t $1 ,669 $1 ,166 $831 33%
US$156/t $1,203 $811 $551 25%
US$188/t $2,134 $1,521 $1,109 40%
Coal Price NPV (CAD$M) at Varying Discount Rates
5% 7.5% 10% IRR (%)
CAD$224/t $2 ,170 $1 ,516 $1 ,080 33%
CAD$203/t $1,564 $1,054 $717 25%
CAD$244/t $2,775 $1,977 $1,442 40%
This PEA is preliminary in nature and includes in ferred mineral resources that are considered to
be too geologically speculative to be subject to economic considerations that would enable them to
be categorized as mineral reserves. There is no cert ainty that the forecast results stated in the PEA
will be realized.
This press release has been reviewed by Warren Ev enson of Stantec, a Professional Geologist and a
Qualified Person, as defined in NI 43-101.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the
policies of the TSX Venture Exchange) accepts res ponsibility for the adequacy or accuracy of this
release.
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About Colonial Coal International Corp.
Colonial is a publicly traded pure-play hard coki ng coal company in British Columbia. The northeast
Coal Block of British Columbia, within which our Company's projects are located, hosts a number of
proven deposits and has been the subject of M&A activities by Xstrata, Walter Energy, Anglo-American,
Conuma and others.
Additional information can be found on the Company's website www.ccoal.ca or by viewing the
Company's filings at www.sedar.com.
Forward-Looking Information
Information set forth in this news release may in volve forward-looking statements. Forward-looking
statements are statements that relate to future, not past, events. In this context, forward-looking statements
often address a company's expected future business and financial performance, and often contain words
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marketing and sale of securities; the need for additional financing; reliance on key personnel; the potential
for conflicts of interest among certain officers or dire ctors with certain other projects; and the volatility of
common share price and volume. Forward-looking stat ements are made based on management's beliefs,
estimates and opinions on the date that statements ar e made and except as required by law, the Company
undertakes no obligation to update forward-looking stat ements if these beliefs, estimates and opinions or
other circumstances should change. Investors are cautioned against attributing undue certainty to forward-
looking statements.
THE FORWARD-LOOKING INFORMATION CONTAINED IN THIS NEWS RELEASE
REPRESENTS THE EXPECTATIONS OF THE COMPANY AS OF THE DATE OF THIS NEWS
RELEASE AND, ACCORDINGLY, IS SUBJECT TO CHANGE AFTER SUCH DATE. READERS
SHOULD NOT PLACE UNDUE IMPORTANCE ON FORWARD-LOOKING INFORMATION AND
SHOULD NOT RELY UPON THIS INFORMATION AS OF ANY OTHER DATE. WHILE THE
COMPANY MAY ELECT TO, IT DOES NOT UNDERTAKE TO UPDATE THIS INFORMATION
AT ANY PARTICULAR TIME EXCEPT AS REQU IRED IN ACCORDANCE WITH APPLICABLE
SECURITIES LEGISLATION.
For further information please contact:
Colonial Coal International Corp.
Shane Austin
604.568.4962
www.ccoal.ca