The Project property is located within the East Kootenay Coalfields and forms part of the Rocky Mountain Foothills structural belt, which lies to the east of the Canadian Rocky Mountain Trench.

Coal seams are found throughout the formation, although the thicker seams occur lower in the section. The formation contains from 4 to over 30 seams, which make up from 8% to 12% of the thickness of the formation. Cumulative coal thickness ranges up to over 70 m. The area has experienced moderate to intense folding and thrust faulting, which has caused repetitions and structural thickening of seams.

The East Kootenay Coalfields lie in the Front Ranges of the Rocky Mountains, which are characterized by north-to-northwest trending concentric folds and west-dipping thrust faults. Tertiary normal faults, some of which are listric and probably occupy earlier thrust surfaces, arealso a major feature.

The Crowsnest coalfield is a complex synclinorium in the Lewis thrust sheet. The major compressional features of the basin are the synclines linked by low-amplitude anticlines. A series of west-dipping thrust faults dominates the structure of the north half of the basin. The major extensional feature is the Erickson fault system, which juxtaposes Mississippian limestone and the Kootenay Group. The fault has a minimum, west side-down, displacement of 1,200 m.

Three formations are recognized within the Kootenay Group, including the basal sandstone Morrissey Formation, the coal-bearing Mist Mountain Formation, and the upper Elk Formation.

The Cadomin Formation, including the Pocaterra Creek (Mbr) unconformity, and more recent Quaternary deposits overlie the Elk Formation. The Elk Formation is the uppermost formation in the Jurassic-Cretaceous Kootenay Group and is characterized by a relative abundance of coarse elastics (sandstone and locally conglomerate) and relative lack of coal, in comparison to the underlying Mist Mountain Formation.

As reported for Teck’s nearby Coal Mountain Operation (Teck 2014), the Elk Formation is coalbearing, with very thin coal seams. The Elk Formation is generally believed to reach a maximum thickness of nearly 550 m in the Fernie basin area.

The Mist Mountain Formation lies beneath the Elk Formation and contains the economic coalbearing strata of interest in the Project area. The Formation is mainly composed of non-marine sandstone, siltstone, mudstone, shale, and bituminous coal seams of various thicknesses. The sandstone is composed of fine to coarse, angular to well-rounded grains of quartz and chert with minor amounts of lithic grains of various other rock types and is typically light to medium grey in colour. The sandstones are moderately to well sorted and generally well indurated and are visible as local cliff-forming features between the other rock units. The predominant siltstones are medium to dark grey in colour, composed almost entirely of quartz, with minor chert and lesser amounts of carbonate minerals. The Mist Mountain Formation can range in thickness from a few hundred metres to over 600 m in the upper Elk Valley.

At this stage of the Project, the conceptual mine plan is to utilize open-pit bench mining methods in distinct phases. The phases are being planned to maximize waste rock management within the pit. In this method of mining, coal seams are exposed by track dozers and hydraulic excavators removing waste rock. A drill and blast program is employed to loosen and fracture waste rock to provide a particle size distribution and looseness in the mineable material, suitable for high-efficiency working by the shovel and haul truck fleet. Waste rock is initially removed from the pit in haul trucks and placed external to the mining area. Once pit capacity has been created after initial mining, waste rock will be placed in pit as backfill, as far as operations allow, although some ex-pit waste storage may still be required in later stages of the mining. All mining benches will be accessed by cut ramps developed prior to bench mining in each phase. Where possible, the cut ramps are laid out within the overall pit limits, in order to minimize external pit excavations.

Breaks between pits and pit sequencing are based on material movement requirements, developing backfill opportunity, accessing requirements and coal blend requirements. As a result, the development sequence has primarily been driven to maximize backfill opportunity, while meeting operational requirements. Once initial mining areas are fully extracted, backfill opportunities are utilized to balance waste rock movement between external spoils and internal backfill.

The Coal Handling and Processing Plant (CHPP) will consist of the raw coal, reject coal, and product coal material handling components and the Coal Processing Plant (CPP), the mechanical coal dryer and Tailings Filter Plant modules.

Over the life of the proposed mine, raw coal will be sourced from the mine. Due to the proximity of the coal reserve to the plant, a run-of-mine (ROM) dump and raw coal delivery system will be developed near the plant. The ROM raw coal from the Loop Ridge open pit mine will be tipped from mining haul trucks into the raw coal ROM bin, or in cases where the raw coal system is unavailable, onto one or two stockpiles.

The raw coal will then be fed into a feeder at the bottom of the ROM bin for initial primary sizing. After sizing, the raw coal will be fed onto a conveyor and then into a secondary sizing station that ensures a plant feed top-size of 50 mm. The raw coal will then be fed into a surge bin that allows for an uninterrupted feed into the Coal Preparation Plant (CPP) during minor ROM interruptions. The capacity of the raw coal handling system and surge bin will be approximately 700 mt/h and 250 mt respectively.

The CPP and tailings filters will be located in close proximity to one another and will be contained within separated sheds with HVAC systems included to maintain temperatures above freezing point during the winter months, and to provide ventilation during summer. The base of the CPP will have a concrete floor slab and access-ways for maintenance vehicles around the building. Maintenance in both the CPP and tailings filter building will be aided by over head travelling cranes spanning the lengths of the building modules, and by monorails which will also be installed above process equipment that requires frequent change-outs.

Coal quality test work and process simulation modeling has shown that the most efficient CPP design consists of a single-stage dense medium cyclone (DMC) for coarse coal processing (+1.2 mm w/w), reflux classifiers for processing fine coal (-1.7 mm w/w + 0.25 mm) and two-stage flotation in a cleaner-scavenger cell arrangement for ultrafine coal (-0.25 mm) processing. The CanAus intent is not to employ a thermal coal dryer in the process, which will reduce greenhouse gas (GHG) and particulate matter emissions as well as the visible steam cloud. Product coal dewatering will be completed by vibrating and scroll centrifuges for coarse and fine coal respectively, and a hyperbaric disc filter for ultrafine coal. The CPP module will be capable of processing 600 t/h of raw coal for a total of 6800 operating hours per year, giving an annual feed rate of up to 4.2 Mmt/a. The CPP will produce approximately 2.1 Mmt/a of product coal at the expected yield of 60% based on the Loop Ridge coal quality data.