Coal Quality

As part of the BFS Coalspur completed additional comprehensive coal quality testing and analysis which finalized coal quality specifications and determined the clean coal yield on Vista. The quality testing demonstrated a substantial 11% improvement in the life of mine clean coal yield to 55% from 50%, as estimated in the PFS, and the identification of two separate coal products: Val d’Or and McPherson seams combined and McLeod seam, both now suitable for export markets.

The coal quality testing was carried out under the supervision of internationally recognized coal industry consultant Robert Leach. The program included extensive testing of data derived from 66 core holes and a three tonne bulk sample which was completed by Coalspur in September 2010. The core holes represent data from all regional areas of Vista and were completed by Coalspur and previous operators. Test work performed included raw coal testing for washing, drying, handling, and settling pond design as well as combustion testing on the clean coal product.

The key parameters that were used to conduct the coal quality testing are as follows:

• 1,200 raw coal entries encompassing all regional areas in Vista;
• Detailed washability reporting yield, ash and calorific value by density on 300 working sections;
• Detailed clean coal analysis on 200 working section simulated product samples; and
• 200 attrition tests (drop shatter and wet tumble) on both coal and stone samples to support washplant design studies.

The coal quality results confirmed that Vista will produce a high quality bituminous, low ash, low sulphur thermal coal. The primary product, which constitutes 88% of the Marketable Coal Reserve, is comprised of the Val d’Or and McPherson seams. The secondary product consists of the McLeod seam. The analysis resulted in a combined clean coal yield from the Val d’Or and McPherson seams of 57.7% at an average calorific value of 5,767Kcal/kg gross as received (“gar”) basis (dense medium cutpoint 1.55 case). The McLeod seam averaged 42.5% yield at 5,410Kcal/kg gar basis (dense medium cutpoint 1.55 case).