The primary focus of Jameson Resources Limited ('Jameson' or 'the Company') during the reporting period was to continue advancing towards environmental approvals and permitting, for development of the Crown Mountain Coking Coal Project ('Crown Mountain' or the 'Project').
SAFETY PERFORMANCE
During the June quarter and year to date, there have been no recordable injuries at Jameson's projects and licences. The 12-month rolling Total Recordable Injury Frequency Rate ('TRIFR') at the end of the June 2020 quarter was 0.
PROJECT SUMMARY
CROWN MOUNTAIN PROJECT - ELK VALLEY COAL FIELD, BRITISH COLUMBIA
The Crown Mountain Project is a potential low-cost, high-quality, open cut metallurgical coal mine currently in the final stages of the evaluation phase, which is comprised of completing optimisation of the Bankable Feasibility Study ('BFS') and submitting an Environmental Assessment Application ('EA Application'). Following the EA Application submittal, work will commence on the additional approvals and permits required to develop and operate the Crown Mountain project. As previously announced in the September 2019 Quarterly Activities Report, all material coal quality testing work has been completed. The Jameson Resources Limited Annual Report for the year ended 30 June 2019 contains the results, which are generally in line with the findings of the 2017 PFS Update.
Work continued on the BFS with Stantec (Vancouver), SRK Consulting and additional work from Sedgman Canada Limited during the quarter. The BFS was expected to be finalised in the September 2020 quarter, providing critical inputs for the EA Application which is expected to be submitted in the March 2021 quarter. On July 9, 2020 subsequent to the June quarter's end, the BFS was released to the ASX entitled 'Crown Mountain Bankable Feasibility Study'.
The Company received the initial surface water quality modelling results from SRK at the end of the quarter. The water quality model is based on the layer cake method for Selenium treatment, which has been under development by Jameson. The layer cake method is incorporated into the BFS mine design and forms the basis for the Selenium mitigation method in the EA Application.
The Crown Mountain EA Application team, coordinated by Dillon Consulting (Vancouver), is a joint effort of several specialized environmental consultants. The team is developing the EA to meet the requirements detailed in the Application Information Requirements (AIR). The key milestones this quarter were the completion of the baseline studies and terrestrial modelling efforts. The focus will now turn to the existing conditions and effects assessment write-ups which are a critical component of the EA Application.
During the quarter, Bathurst Resources Limited ('BRL') advised Jameson of their intention exercise their discretion to pro-rata fund their share of project costs moving forward, rather than continue to sole fund the balance of the remaining Tranche Two Option Advance (C$2.4m remaining of a total of C$5.0m). The pro-rata funding provided will be outside of the remaining funds from the Tranche Two Option Advance. Bathurst currently holds a 20 percent ordinary shares and a total of 22.2 percent equity share of subsidiary NWP including 2.2 percent held as Class B Preference shares from the Tranche Two Option Advance, with Jameson owning the remaining 77.8 percent. Given this scenario was not considered in the original Investment Agreement between the parties dated 28 June 2018 (released to the ASX on 29 June 2018), the parties are in discussions as to the best mechanism to deal with this funding scenario. An update will be announced in due course.
Notwithstanding BRL's intention to pro-rata fund project expenditure at the current time, the Tranche Two funding option remains exercisable at Bathurst's sole option once all permits required to build and operate a coal mine are in hand and a financing package has been arranged. Tranche Two has a remaining outstanding value of C$107.4 million (C$110m less C$2.6m advanced under Tranche Two Option Advance to end of June 2020). Upon exercise of Tranche Two Option, Bathurst's ownership of NWP would increase to 50 percent.
DUNLEVY PROJECT - NORTH EAST BRITISH COLUMBIA
No activity occurred at Dunlevy, which remains in good standing with the Province, and represents a future opportunity for Jameson. Annual rental fees were paid in December 2019. Dunlevy is not part of the Bathurst deal and remains 100% owned by Jameson.
CORPORATE
Jameson has 263.8 million fully paid ordinary shares outstanding, A$2.6 million in cash and equivalents at quarter's end, and no debt. NWP holds A$1.3 million of this cash balance, of which Jameson owns 78% of NWP.
Contact:
Pennee Osmond
Email: pennee.osmond@jamesonresources.com.au.
About Jameson Resources Limited
Jameson Resources Limited (ASX:JAL) is a junior resources company focused on the acquisition, exploration and development of strategic coal projects in western Canada. The Company has an 77.8% equity interest in NWP Coal Canada Limited ('NWP') which holds a 90% interest in the Crown Mountain Coal Project, and a 100% direct interest in the Dunlevy coal project located in British Columbia. Jameson's tenement portfolio in British Columbia is positioned in coalfields responsible for the majority of Canada's metallurgical coal exports and are close to railways connecting to export facilities.
About Bathurst Resources Limited
In July 2018, a subsidiary of Bathurst Resources Limited (ASX:BRL) acquired an 8% interest in NWP, with option to increase that interest to 50% subject to certain milestones and additional payments. Bathurst exercised the Tranche One Option in September 2019 and now holds a 20% interest in NWP with an additional 2.2% held as Class B Preference shares. Bathurst is the largest coal company operating in New Zealand with over 2.2 million tonnes per annum of coal under management. More than 70% of the coal sold is used for steel making, both domestically and for export to Asian coke makers and steel mills. The remainder is sold to domestic users in the agricultural and energy sectors. Bathurst is focussed on low cost, sustainable mining with a strong focus on the local communities and environmental management.
Forward Looking Statements
This announcement contains 'forward-looking statements'. Such forward-looking statements include, without limitation: estimates of future earnings, the sensitivity of earnings to commodity prices and foreign exchange rate movements; estimates of future production and sales; estimates of future cash flows, the sensitivity of cash flows to commodity prices and foreign exchange rate movements; statements regarding future debt repayments; estimates of future capital expenditures; estimates of resources and statements regarding future exploration results and where the Company expresses or implies an expectation or belief as to future events or results, such expectation or belief is expressed in good faith and believed to have a reasonable basis. However, forward looking statements are subject to risks, uncertainties and other factors, which could cause actual results to differ materially from future results expressed, projected or implied by such forward-looking statements. Such risks include, but are not limited to commodity price volatility, currency fluctuations, increased production costs and variances in resource or reserve rates from those assumed in the company's plans, as well as political and operational risks in the countries and states in which we operate or sell product to, and governmental regulation and judicial outcomes. The Company does not undertake any obligation to release publicly any revisions to any 'forward looking statement' to reflect events or circumstances after the date of this release, or to reflect the occurrence of unanticipated events, except as may be required under applicable securities laws.
JAMESON RESOURCES LIMITED 