10/28/08
Industry in Ukraine
Canadian Mining Company Continues Plan to Reopen Coal Mine in Lugansk
By Paul Farley, Nova Mova owner, from Internet sources.
Canadian mining company, Lysander Minerals Corporation, of Vancouver, reported on October 16 that it had completed a technical report on the Verticalnaya coal mine in Ukraine’s Lugansk region and is continuing its plan to reopen the mine on a significantly expanded basis. The report has been filed officially with the Canadian government.
Lysander’s plan is to begin production from the mine in 2013, and the company anticipates that production will continue to 2022. Over the life of the mine, the company estimates that it will produce between 1.3 and 1.8 million tonnes of coal per year.
The initial capital cost to reopen the mine and commence operations is estimated at US$ 237.8 million, and sustaining capital through 2022 is estimated to be another $208.3 million. Operating costs are estimated at $31.19 per saleable tonne of coal. The company estimates the net present value at $352.1 million at a 12-percent discount rate, considers the payback period to be seven years, and the internal rate of return to be 35.2 percent.
Verticalnaya was an operating mine that produced high-quality anthracite coal during the Soviet years, but was shut down and placed on maintenance after Ukrainian independence. Lysander reports that the mine has good access to rail and road transportation, electrical power, and other utilities, and that there are useable buildings existing on the property.
The mine is owned by Skhidna Vugilna Kompania, 51 percent of the shares of which are held by Ukraine Coal Ltd. (UCL). UCL has the right to acquire the remaining 49 percent, and Lysander has an option to acquire all the shares of UCL. Lysander stated that it hopes to be a leader in investment in Ukraine’s mining sector as it develops one of the first modern coal mines in the country.
Lysander’s plan is to begin production from the mine in 2013, and the company anticipates that production will continue to 2022. Over the life of the mine, the company estimates that it will produce between 1.3 and 1.8 million tonnes of coal per year.
The initial capital cost to reopen the mine and commence operations is estimated at US$ 237.8 million, and sustaining capital through 2022 is estimated to be another $208.3 million. Operating costs are estimated at $31.19 per saleable tonne of coal. The company estimates the net present value at $352.1 million at a 12-percent discount rate, considers the payback period to be seven years, and the internal rate of return to be 35.2 percent.
Verticalnaya was an operating mine that produced high-quality anthracite coal during the Soviet years, but was shut down and placed on maintenance after Ukrainian independence. Lysander reports that the mine has good access to rail and road transportation, electrical power, and other utilities, and that there are useable buildings existing on the property.
The mine is owned by Skhidna Vugilna Kompania, 51 percent of the shares of which are held by Ukraine Coal Ltd. (UCL). UCL has the right to acquire the remaining 49 percent, and Lysander has an option to acquire all the shares of UCL. Lysander stated that it hopes to be a leader in investment in Ukraine’s mining sector as it develops one of the first modern coal mines in the country.
Nova Mova Worldwide Business Communication LLC
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