Donkin Exploration Project

General Information

Currently being Updated

Fast Facts

Location	Canada, North America
Products	Coal
Employees	15
Annual production capacity	Donkin is being considered as a 5mtpa underground Longwall operation. Markets are anticipated to be both domestic and export. The short shipping distances to the East Coast of the United States place Donkin in an ideal position to enter this expansive market.

Description

The Xstrata Coal Donkin Exploration Project is based on the Donkin Peninsula in Nova Scotia, Canada. The Project is a joint venture between Xstrata Coal Canada (75%) and Erdene Gold (25%). The Project is managed by Xstrata Coal Donkin Management.

In December 2005 Xstrata Coal with then joint venture partners Kaoclay resources and Atlantic Green Energy Development limited were successful in securing a Special Licence from the Nova Scotia Government to examine the business case for the potential development of the Donkin Mine. Work commenced on evaluating the coal resource in March 2006 and is expected to take approximately 2 ½ years, after which a decision will be made to proceed or otherwise with the project.

Work on the project is proceeding smoothly, with the small workforce of contractors adhering to a very high standard of Health, Safety, Environmental and Community performance. With dewatering well underway, the primary goal is to safely access the Harbour Coal Seam located approximately 2km off shore and 130m below the Atlantic Ocean.

Using sound Health, Safety, Environmental and Community Planning practices, exploration and evaluation activates have commenced including dewatering existing tunnel entries, obtaining coal samples and developing geological and financial models.

Brief history of the operation

Initial development of the Donkin Coal Project was started by the Cape Breton Development Corporation in the late 1970’s. A series of offshore boreholes were drilled and in the early 1980’s work began on the driving of 2 access tunnels. These tunnels were completed in 1988 and are 3600m long and vary between 20% and 1% in grade.

Work on the project was suspended in 1989 due to a downturn in world coal markets and in 1992 a decision was made to seal the tunnels and allow them to flood with groundwater. In June 2006 the Donkin site and sealed access tunnels were purchased by the Xstrata Coal Alliance from the Cape Breton Development Corporation. The tunnels remained sealed until October 2006 when they were successfully re-opened and dewatering and remediation activities commenced on site.

If a decision was made to proceed with this project then it would be anticipated that a Longwall would be in production by 2011.

Additional Information

Community Consultation has been at the forefront of the Donkin Exploration Project since the project commenced in March 2006. To date over 800 community members have been directly consulted on the project in various manners such as public meetings, specific interest group presentations and individual home visits. There has been extensive consultation with the Nova Scotia and Federal Governments regarding the project. In August 2006 a Community Liaison Committee was formed comprising Xstrata Coal Donkin Management and Community representation. The Community Liaison Committee has been actively involved in several high profile community events such as a Beach Clean Up and a Seniors Community dinner, both events were great successes and further strengthened the profile of the Xstrata Coal Donkin Exploration Project within the community in which they operate.

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Donkin Exploration Project

General Information