Summary:
The UHG coalfield is located in south-central Mongolia and covers an area of approximately 10km2 within the Ulaan Nuur Valley of the Gobi Desert. The coalfield is situated within the Omnogovi Aimag (South Gobi province) about 90km east of Dalanzadgad, the provincial capital, and some 540km south of Ulaanbaatar, the national capital.
The Ukhaa Khudag (UHG) coalfield is one of six separate subfields of the greater Tavan Tolgoi deposit, which include the Tsankhi, UHG, Southwest, Borteeg, Eastern and Bortolgoi coalfields. The coalfields are separated by either seam crop limits or fault block boundaries.
Seventeen named coal seams (Seams 0 through 16) have been identified in the Tavan Tolgoi coalfield, of which Seams 0 through 12 have been identified at UHG. These seam groups contain numerous splits, or sub-seams, which amount to 35 distinct and individually modeled coal horizons within the property.
The primary seams considered for mining are Seams 0, 3, 4, 8 and 9. Of these, Seams 3 and 4 are best developed, thickest and most continuous and contain a substantial portion of the coking coal resource within the license.
It is noted that there is some indication that some of the coal seams, specifically the 0A/0B group coal, may be blended with hard coking coal prior to washing without significantly degrading overall coking qualities.
UHG Geologic Structure
The UHG coalfield is a fault-bounded synclinal coal basin developed within an east-west trending graben structure. The syncline axis plunges towards the west resulting in coal seams dipping predominantly to the west and cropping near-surface along the eastern margins of their occurrence.
Coal Seam Stratigraphy
The non-coal rocks of the Tavan Tolgoi Group consist of mudstones, siltstones, sandstones, conglomeratic sandstones and conglomerates. The overburden and interburdens are generally competent, ranging from moderately hard to hard, depending on lithology.
Seam 0 Group
The coal seams of the 0 Seam package are noted for their lower overall coal quality and variability in seam thickness and within-seam partings. The 0A, 0B and 0C Seams are the main seams of interest with the 0C Seam having the most potential to be included as a possible metallurgical product. Both Seams 0C and 0B are relatively thick and show favourable raw CSN4 values in the eastern half of the property where they are within surface mineable depth.
Despite some variation in coal quality, thickness and partings for the 0 Seam package, there remains some opportunity for selective mining of the 0 Seams either as thermal coal product and potential blend coking coal product given that there appears to be some reasonable coking properties in the 0 Seam package, particularly in Seam 0C. Seam 0B has shown some marginal coking properties and Seam 0A is found to occur with frequent in-seam rock partings and to be an inherently “high-ash” seam that would experience significantly lower yields in wash plant analysis.
Seam 3 Group
The 3 Seam package is comprised of essentially three seam splits, the 3A, 3B, and 3C. The most prominent by far of these seam splits is the 3A Seam, which likely represents the three splits coalesced into one main seam body. The 3A Seam thickness remains reasonably consistent throughout the property.
Seam 3A makes up over 10% of the total UHG coal resource and is one of the target coal seams showing favourable metallurgical properties. It is for the most part devoid of in-seam partings, particularly in the southeast, and has a relatively low in-place ash content. Metallurgical tests of raw samples show good swelling properties and bulk sample testing also shows that it has good coking characteristics. Raw volatile percentages are likely to be in the ranges of about 22 to 24 percent for most areas of the deposit.
Seam 4 Group
The 4A and 4C Seams contribute significantly to the UHG metallurgical coal resource, estimated at 9.7% and 10.3% respectively. Metallurgical testing of raw samples, as well as early bulk sample test results, show that Seams 4A and 4C are likely to produce a high quality metallurgical product. Distribution of raw CSN values show both seams, particularly 4C, to average high values over much of the mine area.
In-place ash content is generally quite good for the 4A and 4C Seams. Occasional high ash zones are typically associated with localized zones of in-seam partings that in some instances may be removable. Sulphur content remains low for the 4A and 4C Seams with some isolated high sulphur (>1%) likely to be beneficiated by coal processing and blending to a suitable product.
Seam 8 Group
The 8 Seam package is dominated by the 8B Seam split which represents 7.4% of the total UHG resources. The 8 Seam raw volatiles appear to be higher than the average expected volatile matter content of less than 30% (dry basis) for UHG coal seams. This appears to be a trend observed in Seams 8 and those occurring stratigraphically higher.
Seam 9 Group
The 9 Seam package is split into the 9A and 9B Seams. The 9A Seam has a relatively consistent seam thickness whilst the 9B Seam thickness appears to increase towards the west. Overall volatile content appears to be higher than expectations of less than 30% volatiles (dry basis). Raw sulphur is expected to be less than 1% for most areas of the 9 Seam package, and will be further reduced significantly after coal washing.
Remaining Seams
The remaining allegedly and historically non-coking coal seams (1, 2, 5, 7, 10, 11, and 12) have a contribution of almost 9% to the overall resources at UHG. Seams 1 and 2 are predominantly thin and non-mineable across the property. Seams 5 and 7 occur in localized pods, with the Seam 5 group (5B and 5C) showing some degree of coking potential from raw slim-core analyzes. Seams 10 through 12, due to their relatively high position in the stratigraphic sequence, occur with limited extent predominantly in the northwest portion of the property. Seam 10B shows some coking potential while there is insufficient data to characterize Seams 11 and 12. These seams may be classified as metallurgical coal of some type with further development drilling, and hence may represent some upside for additional coking coal reserves.