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 BORDER PROPERTY - The Border Property is Goldsource Mines' flagship property and the focus of a major coal discovery in 2008. It is located on the eastern edge of mining-friendly central Saskatchewan, about 50 kilometers north of the town of Hudson Bay. The Border Property consists of approximately 130,000 hectares or approximately 35 by 35 kilometres. It is situated along the Durango Coal Trend, which continues to the southeast and northwest of the property. Infrastructure around the Border Property is excellent. The town of Hudson Bay has approximately 2000 inhabitants with a skilled labor force. A major road transects the property and power and water are readily available. A CN railroad line also runs through the property, adjacent to the recent discovery.
Exploration Progress
 To date, 146 holes have been completed and drilling has identified 17 coal deposits at Border, with the recent Fugro airborne gravity surveys indicating good potential for additional coal discoveries and the expansion of several existing deposits.
The new discoveries are confirmation that the geophysical techniques used by the company are successful in identifying coal bearing sub-basins and will continue to be used in identifying other areas for drilling.
The coal is located approximately 80 metres below surface and is potentially open pittable. The coal is ranked as sub bituminous thermal coal. The calorific value of the coal ranges from 17,800 Kj/Kg (7684 BTU/lb) to 21,300 Kj/Kg (9,159 BTU/lb) on an "Air Dried" basis. The average calorific value of the coal is similar to the major producers of the Alberta Plains and the Powder River Basin.
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Pasquia 02 Deposit 47.5m = Cumulative Coal thickness without partings based on Loring Labs analysis, cutoff @ 30% ash. Calorific Values:15,333 Kj/Kg or 6652 BTU/lb. |
A geological model based on all drill holes to date has been developed and initial coal resources of 79.1 million tonnes Indicated, 34.9 million tonnes Inferred and 61.1 million tonnes Speculative have been announced.
Goldsource has incorporated data from the winter 2009 - 2010 drill program into an updated NI 43-101 Technical Report, which includes an updated resource model and revised estimates.
Preliminary Economic Assessment
The Preliminary Economic Assessment ("PEA") was completed in March, 2011 under the direction of Marston Consultants and EBA Engineering Consultants. Initial results from the PEA concluded that:
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The development of the Border Coal Project is technically and economically feasible.
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An on-site clean coal-fired generator is a potential end use of the coal but special design of the coal-fired electric generating plant will be necessary to accommodate the coal quality of the deposits. Abundant biomass resources available in Saskatchewan to offset CO2 emissions to reduce the carbon
footprint can supplement this Border coal. Recent power studies suggest that Saskatchewan's future power requirements may need additional generating facilities.
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An on-site coal to liquids plant also appears to be an alternative for an end use of the coal. Goldsource has signed confidentiality agreements with providers of this technology which was assessed as part of the PEA. Preliminary analyses show that these technologies may be technologically and economically viable at the current price of oil.
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A coal to liquids processing plant producing 14,000 Bbls of liquids per day would cost $1.9 billion and generate a 6% rate of return over a 30 year project life.
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A review of potential power generation and coal to liquids partners is underway. In addition, the study will examine mining and capital costs, transportation and potential export markets.
Exploration Objectives
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Powder River Basin (Peabody Energy)- 20 metres of coal, Border Property has 100 metres of coal |
From the holes drilled to date, the sub-basins appear to be comprised of discrete features containing exceptional coal zone intervals of up to approximately 100 metres thick with their limits defined by certain geophysical signatures and the underlying Devonian limestone. It is believed that the contours of underlying Devonian limestone continue to be a critical factor in defining the sub-basins and this information is being used to target other areas of potential coal deposition at Border.
Results from a recent Fugro airborne Falcon gravity survey completed in the spring of 2010 have been received. Initial assessment of the data shows more precise boundaries of existing deposits as well as newly defined targets. The Company believes that the test programs have enhanced its ability to identify new deposits and better define the boundaries of these unique deposits. With the completion of our recent financing, the Company plans to drill these targets to expand near-surface resources and identify potential tonnages of improved coal quality. |
