Viking Mines (ASX:VKA) is moving to compulsorily acquire all remaining shares in Mongolian focused Auminco Mines that it does not already own.
The company has already secured acceptances in respect of 97.93% of Auminco shares as of the close of its off-market takeover bid on 26 September 2014.
Auminco shareholders will emerge with a 47% stake in Viking after Viking's takeover offer which is significant as Auminco was established by founding shareholders and management of Coalworks Limited that was sold to Whitehaven Coal (ASX: WHC) for ~$200 million in mid-2012.
Auminco's flagship Berkh Uul Bituminous Coal Project has already signed four non-binding memoranda of understanding with Darkhan Thermal Power Plant, Erdenet Power Plant, Darkhan Metallurgical Plant, and the Khutul Cement and Lime Plant relating to future potential coal supply.
It also holds:
- The Khonkhor Zag anthracitic coal project in the Trans-Altai Coal Basin in Govi-Altai Province, South West Mongolia;
- The early stage Buduun Project in a proven hard coal region in Khovd Province, Western Mongolia;
- The Dalt and Budargana coal projects in Dundgovi Province, Central Mongolia; and
- The Tsairt Zinc joint venture project in Sukhbaatar province in eastern Mongolia.
Berkh Uul Project
The Berkh Uul bituminous coal project is located in the Orkhon-Selenge coal district in Selenge Province, Northern Mongolia, approximately 40 kilometres from the Russian border and 200 kilometres east of Darkhan City.
Notably, it is located just 40 kilometres to the existing Trans-Mongolian Railway, which provides a transport link to Darkhan to the south and Russia to the north.
Berkh Uul occurs in the Upper Jurassic - Lower Cretaceous age Sharin Gol Formation within the Orkhon-Selenge Coal Basin, which also hosts a number of large hard coal deposits including the Mongoin Gol, Shariin Gol and Ulaan Ovoot deposits.
It consists of shallow, consistent coal seams of high quality bituminous coal amenable to open pit mining.
Berkh Uul coal is of sales quality without washing. There is potential to further value add to the resource by washing and producing a high quality, high energy thermal coal suitable for export markets.
Mining studies are planned for 2014 to accompany a Mining Licence Application to be lodged during 2014.
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