Recent work at Donkin has focused on planning the implementation of the Continuous Miner Exploration Phase with tenders for all major equipment being received and under evaluation. Investment by the joint venture partners to date is approximately US$ 25 million. The Continuous Miner Exploration Phase will involve additional capital expenditure of approximately US$ 50 million and result in the annual production of more than 250 000 t of coal from the underground development work during the exploration programme.
Discussions continue with key stakeholders regarding the sale of the coal production from the Continuous Miner Exploration Phase, a requirement of advancing the project. The project will require the expenditure of approximately US$ 50 million initially and more than US$ 350 million for the full longwall development in privately funded capital.
The Donkin exploration project is a 75:25 joint venture between Xstrata Coal Canada, a wholly owned subsidiary of Xstrata Coal, and Erdene. Located in Eastern Canada, the high energy Donkin coal resource includes 227 million t of Indicated and 254 t of Inferred high volatile-A bituminous (12 000 – 14 000 Btu), high sulfur, and medium ash coal. The project is located within 35 km of a coal-fired electrical generating plant and a deep-water coal terminal facility. Markets are anticipated to be both domestic and export, and the relatively short shipping distances by water to the US east coast and Europe places Donkin in an ideal position to enter this expanding market.
Granite Hill construction material project
Erdene's Granite Hill project is a former producing granite aggregate quarry in central Georgia. The Company owns the 342 acre property, which holds in excess of a 120 million t resource and is situated on an existing rail line.
RMU's quarry development plan provides for an estimated start-up production rate of one million t of granite aggregate per year, with an initial design capacity of up to three million t. Based on current production projections, the Granite Hill quarry will have an estimated lifespan in excess of 30 years. RMU has designed a quarry mining plan, processing plant and facilities, and has prepared an environmental impact plan. RMU has also acquired additional land adjacent to the Granite Hill property to secure rail access to the site. The construction phase is expected to be completed nine to twelve months after a production decision by RMU. All required operating permits have been received and during the third quarter, RMU began clearing the site and constructing access roads to the initial quarry site. RMU is responsible for fully funding the development and operating programme.
Q3 2009 financial results summary
For the three months ended 30 September 2009, exploration and operating expenses amounted to US$ 948,115 compared to US$ 295,995 in the third quarter 2008. Including capitalised exploration costs and excluding write-offs, exploration expenses were US$ 1 215 699 for the third quarter of 2009 compared to US$ 1 805 187 in the third quarter of 2008.
The company recorded a loss of $ 1 239 158, or US$ 0.01 per share, in the third quarter of 2009 compared with a loss of US$ 887 425, or $ 0.01 per share, in the third quarter of 2008.
At 30 September 2009, Erdene had approximately US$ 14.8 million of cash and cash equivalents on hand, on a consolidated basis, compared with approximately US$ 16.2 million on 31 December 2008.
For the full report, visit: http://www.marketwire.com/press-release/Erdene-Resource-Development-Corporation-TSX-ERD-1077980.html