Cline Mining Corporation T.CMK

Lossan

[mr1derful]

I just took a quick look at the Lossan Feasability Study which was done back in 2005. Some of you freaked out because Cline sold this property for a small sum of $40 million. This was not a very valuable resource. The total saleable coal was just under 14 million tonnes for the WHOLE asset. Roughly 60% was a med vol met coal and the other 40% was PCI quality. Back in 2005 the mining costs were roughly $60 a tonne.I'd be willing to bet the costs would be closer to double today. You also have to add the transportation costs on top of everthing else. The total capital costs were roughly $60 million. Again those are 2005 figures. The feasability study assumed production of 1 million tonnes for 14 years.

The bottom line is there is no way that this resource is worth anything close to the $500 million that Xstrata paid for the coal assets from Talisman.

[SKGREG]

Thanks Mr1derful, good post. 

[Caerus88]

According to this below, it was a little more than 14 million tons. However, I also found that the property purchased by Xstrata from First Coal Corporation for $153m had estimated reserves of 1.6 billion MT (don't know if that was NI 43-101 complient). So maybe the Lossan sale wasn't all that bad and maybe the real winners were Talisman Energy. Xstrata Completes Lossan

[mr1derful]

Caerus88 you obviously didn't read the feasability study.  Cline quotes that "186 million mt being the measured and indicated categories." of reserves. The 186 mt includes all the overburden and waste rock. After you remove all the overburden and the waste rock and wash the coal you are left with 14 million tonnes of actual saleable coal.It's a bit confusing the way those

[jsnfernley]

I had meant to go back and look at this, I just now found the time.  You are correct, it was a small property (4,000 ha), and there was a high ash content in a lot of the samples. Xtrata can reexamine the resources and blend this coal with its other operations. Out of resources of 200 Mt, the reserves were slightly less than 14 Mt saleable.  Resources are defined loosely as having a

[Caerus88]

I stand corrected. Thanks for the clarification.

[seanj1]

I guess Bates did sell Lossan at a fair price after all. All those insults towards him on this board was not warranted after all... I didn't think he would be that stupid to sell that property for so much less than it was worth. US financials are shining and US economy is getting better , market manipulators need to balance it with some negative news  so we are getting headlines like