Morien Announces Commencement of Production from the Donkin Coal Mine
Morien Announces Commencement of Production from the Donkin Coal
Mine
March 1 , 201 7 – Halifax, Nova Scotia – Morien Resources Corp. ("Morien" or the
"Company") (TSXV:MOX), is pleased to announce that it has received notice from Kameron
Collieries ULC (“Kameron”), the owner/operator of the Donkin Coal Mine (“Donkin”) in Cape
Breton, Nova Scotia, that production at Donkin has commenced.
Initial production at Donkin is from a single continuous miner, with the addition of a second
continuous miner scheduled for later in 2017. A total of 64 full-time employees/contractors are
currently working onsite at Donkin , and Kameron is forecasting a total of 135 full -time workers
onsite at full production. Construction of a coal handling, preparation and processing plant is
anticipated to begin during the first half of 2017. In 2018, two, dual coal sections are anticipated
to be operational; a typic al coal section consists of two continuous miners, six battery haulers,
one feeder breaker, and two roof bolters.
Kameron has indicated that it expects the washed coal quality of Donkin to be a high fluidity,
high volatile metallurgical coal, with 3 .0% a sh, 1. 65% sulphur, 13,500+ BTU/lb , 0.88% RO,
+25,000 ddpm fluidity, and 120 -150 dilation. Kameron has cited the following as key project
strengths at Donkin:
Coal quality
o low ash, high energy thermal coal;
o high quality metallurgical coal (low ash, high vitrinite content, high fluidity, high
crucible swell number (“CSN”));
Low mining costs – 8.1 raw tonnes per linear foot, 6.9 clean tonnes per linear foot;
Short truck haul to local power stations and deep water ports; and
Substantial Resource – 483 million tonnes; 30 year expected project life (2 continuous
miner sections)
(1) The Donkin Coal Technical Report, dated November 2012 , found on Morien’s SEDAR profile,
supports the above technical disclosures.
Morien Royalty and Milestone Payments
On February 27, 2015, Morien sold its 25% working interest in Donkin to Kameron for
aggregate cash consideration of $5.5 million (three payments, see below) and a gross production
royalty (see below).
Morien owns a gross production royalty of 2% on the f irst 500,000 tonnes of coal sales per
calendar quarter (excluding the initial 10,000 tonnes of coal produced and sold from Donkin) and
4% on any coal sales from quarterly tonnage above 500,000 tonnes (“Royalty”). The Royalty is
payable to Morien on a quarterly basis over the anticipated 30 plus year mine life.
Production is expected to rise to 2.75 million sales tonnes per year (the current permitted
production rate) over a three to four year period. Using a range of coal pricing, annual royalty
payments could be in the order of $4.0 million to $8 .0 million at full production . These values
are only estimates based on assumptions that Morien management consider to be reasonable , as
approved on February 28, 2017 . Actual results and royalties received, if any, and subject
primarily to production rates and coal pricing, may vary from those estimated by Morien.
Morien received a $2 million milestone payment on closing of the transaction with Kameron
(February 27, 2015) and received a second milestone payment of $2 million on the second
anniversary of the closing ( February 27, 2017 ; click here for Morien news release). M orien is
entitled to receive an additional $1.5 million on the earlier of first commercial sale of export coal
from Donkin and the third anniversary of the closing of the transaction (February 27, 2018).
About Morien
Morien is a Canadian mining exploration and development company, focused on unique mineral
industry opportunities in North America with two long-life royalty assets and a strong cash
position. Morien has 52,986,614 issued and outstanding common shares and a fully diluted
position of 58,189,114. Further information is available at www.MorienRes.com.
Forward-Looking Statements
Some of the statements in this news release may constitute "forward -looking information" as
defined under applicable securities law s. These statements reflect Morien's current expectations
of future revenues and business prospects and opportunities and are based on information
currently available to Morien. Morien cautions that actual performance will be affected by a
number of factors, many of which are beyond its control, and that future events and results may
vary substantially from what Morien currently foresees. Factors that could cause actual results to
differ materially from those in forward -looking statements include risks a nd uncertainties
described in Morien’s annual information form filed with the Canadian Securities regulators on
SEDAR (www.sedar.com). Morien cautions that its royalty revenue will be based on production
by third party property owners and operators who will be responsible for determining the manner
and timing for the properties forming part of Morien’s royalty portfolio. These third party
owners and operators are also subject to risk factors that could cause actual results to differ
materially from those predicted herein including: volatility in financial markets or general
economic conditions; capital requirements and the need for ad ditional financing; fluctuations in
the rates of exchange for the currencies of Canada and the United States; prices for commodities
including gold, coal and aggregate; unanticipated changes in production, mineral reserves and
mineral resources, metallurgical recoveries and/or exploration results; changes in regulations and
unpredictable political or economic developments; loss of key personnel; labour disputes; and
ineffective title to mineral claims or property. There are other business risks and hazards
associated with mineral exploration, development and mining. Although Morien believes that
the forward-looking information contained herein is based on reasonable assumptions, readers
cannot be assured that actual results will be consistent with such sta tements. Morien expressly
disclaims any intention or obligation to update or revise any forward -looking information in this
news release, whether as a result of new information, events or otherwise, except in accordance
with applicable securities laws. All dollar values discussed herein are in Canadian dollars.
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 release.
For more information, please contact:
John P.A. Budreski, President and CEO
Phone: (416) 930-0914
or
Dawson Brisco, P.Geo, VP Corporate Development
Phone: (902) 466-7255
www.MorienRes.com