Outline. Anderson Mining Company Ltd. Peel Region - Yukon s Mineral Wealth Wind River Energy Project The Future Planning Issues

Transcription

1 Outline Anderson Mining Company Ltd. Peel Region - Yukon s Mineral Wealth Wind River Energy Project The Future Planning Issues

2 Anderson Mining Company Limited Incorporated Jan 2003 Initially a mineral exploration company Assessed other business ventures such as calcium chloride, cement production Currently Developing the Wind River Energy Project

3 Mineral Wealth of Yukon From what is known now The Peel Watershed Region contains the greatest part of the mineral wealth of the Yukon Recent Rail Preliminary Feasibility Assessment by Charles River Associates

4 Raw Commodity Values

5 Peel Planning Region MinFile References COAL Crest Iron

6 Rail Freight Flows

7 Other Areas of Mineral Interest Coal Exposures of Lower Bonnet Plume Formation Upper Bonnet Plume Formation (thick lignite observed

8 Mineral Interest (continued) Iron Other exposures of the Rapitan Formation Crest Iron Edge of deposition?

9 Mineral Interest (continued) Wernecke Breccias (Olympic Dam?) Lead Zinc Copper, Gold, Uranium Limestone Dolostone Aggregate Salt?

10 Wind River Energy Project What is it? - (Reference Case) Underground Coal Mine(s) 8-10 Million metric ton per year Coal to Liquids Plant 40,000 barrel per day 390 km 12" Liquid Petroleum Product Pipeline

11 What Does it Do? $1.3 Billion per year of Yukon Exports ($1.80 US/gal Wholesale, US$=CDN$1.18) 40,000 bbl/day Primarily Diesel and Naphtha

12 The Scale of Economic Impact Probably the largest mining and industrial development undertaking in Yukon s History in terms of economic impact

13 Major Yukon Developments Klondike Gold Fields (last 110 years) White Pass RR and River Transportation System Alaska Highway Canol Pipeline and Whitehorse Refinery All other Yukon Mines Combined (last 110 years) Commercial and Residential (last 110 years) Modern Government Services

14 Future Yukon Developments Alaska Gas Pipeline Conventional Oil & Gas Development (as its potential is currently estimated) Potential North South Rail Link

15 How long Will it Last? 25 Years - high likelihood Measured, Indicated and Inferred Resources: 550 million tons, Assuming 50% Recoverable 50 Years - reasonable likelihood Assumes doubling resources and 50% Recoverable 100+ Years - reasonably possible One study speculates a possible 28 billion tonne in situ geological resource for Bonnet Plume Basin (Including upper (lignite) and lower Bonnet Plume Formation)

16 Yukon Economic Impacts $2 Billion Capital Project and associated Contracting and Job benefits About 500 long term direct employment Local Contracting and Supply Significant Tax Revenue

17 The Coal Property Yukon's largest quantified coal resource over 550 Mt of high volatile bituminous C coal in seams of mineable thickness located in the Peel Watershed of Northern Yukon Approximately 130 km to the east of the Dempster Highway 165km North of Keno Hill

18 Peel Planning Region MinFile References COAL Crest Iron

19 WIND RIVER COAL DEPOSITS

20 Wind River Coal Field The coal field consists of 6 widely spaced deposit areas identified by drilling conducted in by a previous operator. The deposit areas are held by Anderson Mining Company Ltd. under 5 coal exploration licenses covering 201,276 acres. Historic Resource Calculation Summary (million metric tons) Deposit Measured Indicated Inferred Total Illtyd Wernecke Airstrip West Illtyd Garlic Ring Spaceship

21 Access WIND RIVER TRAIL

22 Infrastructure Requirements for Wind River Energy Project Upgraded Winter Road (minimum) Air Strip for 737 (minimum) Project Provides Own: Power Worker Housing (fly in, fly out) Water Treatment Pipeline

23 PROJECT ECONOMICS BUSINESS CASE

24 The Oil Problem World wide - little new oil being discovered. For every four dollars spent, one dollar worth oil is found (Oil Industry Analyst commenting on 1990 results). Peak Oil

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26 ASPO s Oil Production Estimates

27 Oil Discovery and Production

28 Oil Price

29 Why is the Oil Price High? Supply just barely meets demand. What happens when supply cannot meet demand? Demand destruction by price rise. Emerging economies: China, India are very low per capita oil users. Growth in their demand is somewhat insensitive to price.

30 How AMCL Plays Into this Trend Coal to Liquids processing near the coal mining site(s) Pipeline transport to North American markets

31 The Pipeline Route

32 Pipeline Illtyd Creek to Norman Wells Pipeline 390 km, 12 inch Liquid Petroleum Pipeline Rule of Thumb cost: $120,000/km per inch $562 Million Capital Cost

33 Pipeline Economics $562 Million Capital Cost 30 year life, $0 salvage, 10% rate of return Requires Annual Toll: $60 Million (Operating costs not considered) 40,000 barrel/day - toll would be $28.85/m 3 Toll is Currently $30.09/m 3 from Norman Wells, NWT to Zema, Alberta (May decrease with increased volumes from this project) $59/m 3 into Zema, Alberta (Further marketing studies required)

34 Transportation PRODUCT COAL BULK VALUE $50 USD/m 3 (FOB Pacific Port) PETROLEUM LIQUID $500 USD/m 3 (Alberta Refinery)

35 Where Does The Product Go Next? US Imports of Crude and Refined Petroleum Products: 12 Million Barrels/day (40,000 bbl/day is 0.33% of this Market)

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37 DOE/EIA-Weekly Petroleum Status Report - October 21, 2005

38 Coal to Liquids Process

39 Why Isn t Everyone Doing It? Ill Formed Question? - They Are. South Africa (for 50 years) China (plans for $24 billion investment) USA (60 years of research, plans for plants) Europe (Engineering and Plant Components) Canada (AMCL planning Wind River Project)

40 China AFX News Limited China considers 24 bln US$ investment in coal-to-liquids technology - report , 10:06 PM 'If all of these projects went ahead, it would be the equivalent of replacing one million barrels of oil a day, Jim Brock, a Beijing- based energy consultant, was quoted as saying.

41 What is Happening Today October 28, Engineering News China prefeas study nearing completion The prefeasibility studies that were initiated by Sasol Synfuels International at the end of last year to determine the economic viability of constructing two bbl/d coal-to-liquids (CTL) plants in China, are nearing completion, Engineering News can today report.

42 What Does It Cost? Ball Park Estimate: 40,000 bbl/day Plant and Coal Mine $1.6 Billion Capital Cost

43 What are we doing Going Forward Building out talent base Raising Funds Feasibility Study Project Permitting Building Supplier/Partner Relationships Attracting Large Industrial Partners

44 Where Will the Money Come From? Oct 28, 2005 (The Boston Globe - Knight Ridder/Tribune Business News via COMTEX) Two of the world's biggest oil companies yesterday reported record profits, Exxon Mobil Corp. earned almost $10 billion in the third quarter, 75 percent more... Royal Dutch Shell PLC made a profit of $9 billion, a 68 percent gain. This money has to be re-invested where?

45 The Future of Industrial activity in the Peel Region Iron Coal Bed Methane CO 2 Sequestration Electrical Generation Infrastructure Diversified Economic Development Community Development

46 Iron Previous Studies - Iron Ore Export Marginal Economics - Infrastructure Some Recent Interest in Steel Production Large Investment - Great Risks Iron Reduction using local Coal may be an economic entry point

47 Coal Bed Methane Good potential in Bonnet Plume Basin Environmental Bug-a-boo Political Hot-Potato Alberta is having good success with fledgling CBM industry -shows great promise BC, Alberta actively Promoting CBM Regulatory/Tenure uncertainty in YT

48 CO 2 Sequestration (Sedimentary Basins Such as Bonnet Plume) Coal Bed Methane Adsorption Property of Coal CO 2 in, Methane Out Enhanced Oil and Gas Recovery CO 2 is liquid under pressure Acts as low viscosity solvent

49 Electrical Generation Clean Coal Technologies Combined Cycle (just arriving now) Zero Emission Technologies (in works) Co-Generation Mackenzie Pipeline Compression Major Electrical Transmission Infrastructure

50 Infrastructure Roads Rail Electrical Transmission Pipelines Airport

51 Diversification of the Economy 40,000 bbl/day of petroleum products supports about 1M people and $28BUS in GDP in the US The coal and iron resources in the Peel are world class. Entire civilized societies were built from the ground up on similar resources

52 Community Development This needs to be examined in terms of Sustainable Development

53 Issues for the Planning Board Recognition that Industrial Development is a component of Sustainable Development Clarify issues of access Continue building the information base Foster consensus