Prophecy Coal has said a preliminary economic assessment (PEA) for its two Chandgana Tal mining licences contain an estimated 124 million tons of coal in the measured resources category, providing for a potentially economically viable project.The PEA examined the economics of coal production from the mining licences and excluded the Chandgana Khavtgai exploration licence. Prophecy’s wholly owned subsidiary Chandgana Coal intended to mine the coal and supply it to the proposed 600-MW Chandgana mine-mouth power plant, which is planned to be operated by Prophecy subsidiary Prophecy Power Generation.
The PEA found the average in-place coal gross calorific value is 3 306 kcal/kg.After a short ramp-up period, mine production would be 3.5 million tons a year throughout the 30-year life of the mine, to meet the demands of the power plant. The mine could produce 103.9 million tons of coal over the life of the mine.The mine would be constructed at a cost of about $31 million, while the life-of-mine capital costs were expected to total $160.2 million. The project has an internal rate of return of 36% and it would take four years to pay back the initial capital expenditures.