SouthGobi Resources Limited has a 100% shareholding in SouthGobi Sands LLC, the Mongolian registered company that holds SouthGobi’s mining licenses in Mongolia and operates the flagship Ovoot Tolgoi coal mine.
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Summary:
The geological history of the southern part of Mongolia is characterized by the continental accretion and Basin-and-Range style crustal extension, followed by regional-scale compressional folding and faulting. Elongated, east-west trending mountain ranges and intervening basins are therefore widely present in the region. Those structures are dominatly composed of Late Cretaceous to Permian-aged sedimentary sequences, overlain by Quaternary unconsolidated sediments. Mountain ranges between the basins comprise crystalline basement rocks dominated by intermediate to high angle faults that show evidence for both compressional and extensional movement. The most prominent structure in relation to the Ovoot Tolgoi Deposit is the arcuate, east-west-trending, moderately-dipping Nariin Sukhait fault where the Late Permian coal-bearing sequences are exposed.
The Ovoot Tolgoi Coal Mine, which comprises of the Sunset Coalfield in the west and the Sunrise Coalfield in the east, is one of the three operating coal mines in the region of Nariin Sukhait.
The current geological understanding of the deposit has organized the coal seams into a number of Seam Groups including the Seam Nos. 4, 5L, 5U, 6, 7, 8, 9, 10 and 11. Each of the Seam Groups are further divided into a number of sub-layers or known as plies based on parting material within the Seam Groups.
The overall estimated thickness of the coal-bearing sedimentary sequence is 1,370 m with a cumulative thickness of the coal seams ranging from 68mto 250m. lnterburden between the coal seams is dominated by sandstones and conglomerates, whereas partings within the seams are mostly mudstones and carbonaceous mudstones.
The main coal resources of the Ovoot Tolgoi Coal Mine are contributed by the Seam Nos. 5L and 5U which are identified in both the Sunset and Sunrise Coalfields. In the Sunrise Coalfield, the Seam No. 6 and 7 are identified which could potentially be related to Seam Groups 8, 9, and 10 identified at the Sunset Coalfield.
The remainder of the Resource in the Sunset Coalfield is found in the Seam Nos. 4, 8, 9, 10 and 11 that contain multiple discrete seams. In the Sunrise Coalfield, the Seam Nos. 1, 2 and 3 that were described in the early work at Nariin Sukhait, have not been identified in the SGS’s property.
Sunrise Coalfield
The Sunrise Coalfield is located on the southeast corner of the MAK’s mining license. The Seam No. 5 is currently mined by MAK and MAK-Qinghua and is in this area along the axis of a regional-scale antiform as shown in Figure 7-3. This structure trends to the southwest from the MAK East Pit and forms the basis for the SGS’s resources at the Sunrise Coalfield.
The coal-bearing section is a southeast-dipping with an average dip of around 35 degrees. Minor Seam Nos. 6 and 7 occur above the Seam No. 5 and Seam No.4 occurs beneath the Seam Nos. 5. Seams No. 6 and 7 are probably equivalent to the Seams Nos. 8, 9 and 10 at Sunset Coalfield, but correlation has not been undertaken. Coal resources estimated for the Sunrise Coalfield is largely contributed by Seam No. 5.
Sunset Coalfield
The Sunset Coalfield is located on the southwest corner of the MAK’s mining license. Coal resources occur along a southeasterly-dipping monocline, which could represent a preserved limb of a southwest plunging antiform extending in a north-east/south-west direction from the exposure in the north-west of the Sunset Pit, through to the MAK pit.
Norwest suggested that a thrust fault system controls the distribution of coal, dividing the Sunset Coalfield into a southern and a northern resource block. The more steeply dipping rocks of the southern block have moved over the northern block, which contains a repetition of the upper seams (Seam Nos. 8, 9, and 10). As a result of further drilling in 2010, seams were re-correlated in 2010 by MGBS, and the fault repeat of the upper seams has been re-correlated as No. 5 Seam. Faults were not included in MBGS’s geological model in 2010 or 2011.
In the north of Sunset, the seams dip towards south-east at around 20 degrees, however further south the dip increases to around 45 degrees. To the west, the seams dip towards south-west.
The majority of resources are contributed by the Seam Nos. 5L and 5U within a southeast dipping coal-bearing sequence. Additionally, a considerable proportion of resources occur in the upper coal-forming Seam Nos 8, 9, and 10.