Colonial Coal Announces Combined Results of Recent Preliminary Economic Assessments FOR Its Flatbed and Huguenot Projects
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COLONIAL COAL INTERNATIONAL CORP.
Suite 200 -595 Howe Street, Vancouver, British Columbia, Canada, V6C 2T5
Telephone: (604) 568-4962
NEWS RELEASE
COLONIAL COAL ANNOUNCES COMBINED RESULTS OF RECENT
PRELIMINARY ECONOMIC ASSESSMENTS FOR ITS FLATBED AND HUGUENOT
PROJECTS
Vancouver, B.C., Canada – January 8, 2019 – Colonial Coal Inter national Corp. (TSX-V: CAD)
(the “ Company” or “ Colonial Coal ”). David Austin, Colonial Coal’s President and CEO, is
pleased to announce that on December 21, 2018, the Company file d o n S E D A R a T e c h n i c a l
Report, in accordance with National Instrument 43-101 Standards o f D i s c l o s u r e f o r M i n e r a l
Properties (“ NI 43-101 ”) requirements, detailing the results of the recently complete d
Preliminary Economic Assessment (“ PEA” ) f o r t h e G o r d o n C r e e k P r o j e c t ( “Gordon Creek ”)
that forms part of the Company’s 100% owned Flatbed metallurgic al coal property located
approximately 27 kilometres south-southeast of Tumbler Ridge in northeast British Columbia.
Highlights of the Gordon Creek PEA Technical Report were previo usly reported by Colonial
Coal in a news release dated November 12, 2018.
The PEA for the Gordon Creek Project is the second such study t o be completed for Colonial
Coal’s coking and metallurgical coal projects during 2018; the first being that for the Huguenot
coking coal Project (“Huguenot”), previously reported by Colonial Coal in a news release date d
July 10, 2018. Selected highlights from the PEA’s of both Proj ects are re-presented below. For
additional information, the reader is directed to the news rele ases stated above and the PEA
Technical Reports filed on SEDAR on December 21, 2018 and Augus t 2, 2018 for the Gordon
Creek and Huguenot Projects, respectively.
Gordon Creek Project PEA
The Gordon Creek Project PEA Technical Report was prepared by S tantec Consulting Services
Inc. (“ Stantec”). In summary, Stantec used previously reported (November 27, 2017 and
January 16, 2018 and by way of corresponding NI 43-101 Technical Report filings) metallurgical
coal resources (reported by Norwest Corporation (“ Norwest”)), developed a conceptual mine
plan to exploit the coal resources using underground mining methods and prepared scoping-level
cost estimates and economic analyses. In the highlights presen ted below, all costs are in US
dollars; where Canadian dollar equivalents are provided, they h ave been converted using an
exchange rate of US$1.00 equals CAD$1.30.
The Gordon Creek PEA is preliminary in nature and includes Infe rred 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 certainty that the forecast results
stated in the Gordon Creek PEA will be realized.
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Coal
Price/Tonne
NPV (millions) at Varying Discount Rates with
5% 7.5% 10% IRR (%)
US$160.5 $1 ,081 $691 $446 24.4%
CAD$208.7 $1 ,405 $898 $579 24.4%
The Gordon Creek Project has an indicative after-tax (and royal ty) net present
value (“ NPV”) of US$691 million (CAD$898 million) using a 7.5% discount
rate, and an internal rate of return (“IRR”) of 24.4%, based on a weighted average
coking coal price of US$164.8 per tonne and a premium pulverize d coal injection
coal price of US$140.5 per tonne.
The Gordon Creek PEA is based on a conceptual underground mine plan that
targets 111.6 million run-of-mine (“ ROM” ) t o n n e s o f r e s o u r c e , w i t h a y i e l d o f
51%, producing 57.4 million tonnes of clean coal over a mine life of 30 years.
Geological modeling and resource estimation of the Gordon Creek deposit have
identified an Inferred coal resource of 298 million tonnes.
In full mine operation, projected clean coal production ranges from 1.6 million
tonnes per annum (“Mt/a”) to 2.6 Mt/a, and averages approximately 1.9 Mt/a.
The pre-production capital cost for the underground mine is est imated at US$300
million (CAD$391 million), with additional sustaining capital o f US$406 million
(CAD$528 million) over the life-of-mine (“ LOM”). The proposed payback of
initial capital is estimated to be within three years from the start of coal
production.
The Gordon Creek project’s total cash operating cost is estimat ed at US$80.91
(CAD$105.19) per clean coal tonne. This includes direct mine si te costs of
US$41.16 per tonne, offsite costs ( transportation and port char ges) of US$25.42
per tonne and indirect costs of US$14.33 per tonne.
Huguenot Project PEA
The Huguenot Project PEA Technical Report, was prepared by Norw est now Stantec Consulting
Services Inc. (“ Stantec”). In summary, Stantec used previously reported (September 24, 2013
and by way of corresponding NI 43-101 Technical Report filings) coking coal resources and
conceptual mine plans taken from a PEA prepared by Norwest, to exploit the coal resources
using a combination of open pit and underground mining methods. The 2013 study was up-dated
by preparing current scoping-level cost estimates and economic analyses. In the highlights
presented below, all costs are in US dollars; where Canadian do llar equivalents are provided,
they have been converted using an exchange rate of US$1.00 equals CAD$1.30.
The Huguenot PEA is preliminary in nature and includes Inferred mineral resources that are
considered to be too geologically speculative to be subject to economic considerations that would
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enable them to be categorized as mineral reserves. There is no certainty that the forecast results
stated in the Huguenot PEA will be realized.
Coal
Price/Tonne
NPV (millions) at Varying Discount Rates with
5% 7.5% 10% IRR (%)
US$172 $1 ,669 $1 ,166 $831 33%
CAD$224 $2 ,170 $1 ,516 $1 ,080 33%
The Huguenot Project has an indi cative after-tax (and royalty) NPV of US$1,166
million (CAD$1,516 million) using a 7.5% discount rate, and an IRR of 33%,
based on a coking coal price of US$172.0 per tonne.
The Huguenot PEA is based on conceptual open pit and undergroun d mine plans
that target 122.3 million ROM tonnes of resource, with a yield of 73%, producing
89.3 million tonnes of clean coal over a mine life of 31 years.
The conceptual open pit mine plan targets 56 million ROM tonnes of resource at
an average stripping ratio of 8.6 :1 (bank cubic metres :ROM to nnes) while the
conceptual underground mine plan targets an additional 66 milli on ROM tonnes
of resource. The open pit operates during Years 1 - 14 while t he underground
mine would operate during Years 3 - 31, with both the open pit and underground
mine operating simultaneously during Years 3 - 14.
Measured and Indicated coal resources total 277.7 million tonne s (132.0 million
tonnes surface plus 145.7 million tonnes underground). Inferre d resources total
an additional 119.2 million tonnes (0.5 million tonnes of surfa ce plus 118.7
million tonnes underground).
In full mine operation, projected clean coal production from co mbined surface
and underground mining operations ranges from 1.4 Mt/a to 5.9 M t/a, and
averages approximately 3.0 Mt/a.
The pre-production capital cost for the proposed surface and un derground mine is
estimated at US$661 million (CAD$859 million), with additional sustaining
capital of US$178 million (CAD$231 million) over the LOM. The proposed
payback of initial capital is estimated within 5 years from start-up of operations.
The Huguenot Project’s total cas h operating cost is estimated a t US$106.96
(CAD$139.05) per clean coal tonne. This includes direct mine si te costs of
US$67.20 per tonne, offsite costs ( transportation and port char ges) of US$28.30
per tonne and indirect costs of US$11.46 per tonne.
Mr. Austin stated: “ During the past six months Colonial Coal has completed PEA stud ies for
each of its 100%-owned Huguenot and Flatbed Projects which are located in northeastern British
Columbia. The completion of the PEA for the Gordon Creek Proje ct represents a significant
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milestone in the advancement of this Project and the updated PE A for Huguenot supports, at a
PEA level of confidence, that Project’s potential to become a stand-alone mine development”.
This news release has been reviewed by each of Derek Loveday, P .Geo. (for the Gordon Creek PEA), and
Warren Evenson, CPG. (for the Huguenot PEA), of Stantec, Profes sional Geologists and Qualified
Persons 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 responsibility for the adequacy or accuracy of this news
release.
About Colonial Coal International Corp.
Colonial Coal is a publicly traded coal corporation in British Columbia that focuses primarily on coking
coal projects. The northeast Coal Block of British Columbia, w ithin which our Corporation’s projects are
located, hosts a number of prove n deposits and has been the sub ject of M&A activities by Anglo-
American and others. Additional information can be found on th e 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 involve 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 financia l performance, and often contain words
such as "anticipate", "believe", "plan", "estimate", "expect", and "intend", statements that an action or
event "may", "might", "could", "s hould", or "will" be taken or occur, or other similar expressions. By
their nature, forward-looking statements involve known and unkn own risks, uncertainties and other
factors which may cause our actual results, performance or achi evements, or other future events, to be
materially different from any future results, performance or ac hievements expressed or implied by such
forward-looking statements. Such factors include, among others, the following risks: risks associated with
marketing and sale of securities; the need for additional financing; reliance on key personnel; the potential
for conflicts of interest among certain officers or directors w ith certain other projects; and the volatility of
common share price and volume. Forward-looking statements are m ade based on management's beliefs,
estimates and opinions on the date that statements are made and except as required by law, the Company
undertakes no obligation to update forward-looking statements i f 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 TH IS NEWS
RELEASE AND, ACCORDINGLY, IS SUBJ ECT TO CHANGE AFTER SUCH DATE. READERS
SHOULD NOT PLACE UNDUE IMPORTANCE ON FORWARD-LOOKING INFORMATIO N AND
SHOULD NOT RELY UPON THIS INFORMATION AS OF ANY OTHER DATE. WHI LE THE
COMPANY MAY ELECT TO, IT DOES NOT UNDERTAKE TO UPDATE THIS INFO RMATION
AT ANY PARTICULAR TIME EXCEPT AS REQUIRED IN ACCORDANCE WITH AP PLICABLE
SECURITIES LEGISLATION.
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For further information please contact:
Colonial Coal International Corp.
Shane Austin
604.568.4962
www.ccoal.ca