Canadian mining company Strategic Metals released a scoping study and Preliminary Economic Assessment for its Division Mountain project on 20 August. The project contains a measured resource of 52.5 Mt of High Volatile “B” Bituminous coal and envisages an open-pit mine producing 0.5 Mt/y of clean coal, together with either one 100 MW or two 50 MW coal-fired power plants serving Yukon’s isolated power grid. At the proposed production rate, the measured resource could supply a 100 MW plant for approximately 105 years, although the preliminary mine and power plant designs are based on a 30-year operating life.
The project has an estimated total capital cost of $978.6 million, while clean coal could be produced and delivered at an average cost of $52/t. Under the base case, an electricity sales price of approximately $194/MWh would be required to generate an after-tax IRR of around 8% at an 8% discount rate. With full carbon taxes, the required sales price would rise to $292/MWh. The project remains at a preliminary assessment stage, with no construction permits, financing arrangements, power purchase agreement or commissioning schedule disclosed.
