MinE 484: Mine Design ReportMinE 484: Mine Design Report

By: Morgan M. SearsBy: Morgan M. Sears4/26/074/26/07

Analysis of a Sewell Seam Reserve

IntroductionIntroduction

nn Sewell Coal SeamSewell Coal Seam

nn Smokeless Coal (Hard Coking Coal) Smokeless Coal (Hard Coking Coal)

nn Vary rare in the Western HemisphereVary rare in the Western Hemisphere

nn OPEN YOUR MIND OPEN YOUR MIND –– This is a small operation very This is a small operation very different to what you see in the Pittsburgh #8 Seamdifferent to what you see in the Pittsburgh #8 Seam

Location and TransportationLocation and Transportationnn Nicholas County, WVNicholas County, WV

nn Near CraigsvilleNear Craigsville

nn No rail No rail

nn Met coal transported by truck Met coal transported by truck to Calgon Carbon in KY.to Calgon Carbon in KY.

nn Steam coal sold on the spot Steam coal sold on the spot at the barge loadout on at the barge loadout on Kanawha RiverKanawha River

Property DivisionProperty Division

Reserves and QualityReserves and Quality

nn Cranberry Section Cranberry Section contains 2.2 million incontains 2.2 million in--situ tonssitu tons

nn Crupperneck “A” Crupperneck “A” Section contains 5.3 Section contains 5.3 million inmillion in--situ tonssitu tons

Crupperneck "A" Section

Area (acres) Area (%)

Thickness (feet) Clean Tons

Measured 767 100 4.1 5,656,238

Indicated 0 0 0 0

Inferred 0 0 0 0

Total > 3’

767 100 4.1 5,306,594(Average)

Cranberry Section

Area (acres)

Area (%)

Thickness (feet) Clean Tons

Measured 393 99 3.4 2,416,005

Indicated 5 1 3 24,424

Inferred 0 0 0 0

Total > 3’ (Average) 398 100 3.4 2,216,263

Reserves and QualityReserves and Quality

nn Crupperneck “B” Crupperneck “B” Section contains 2.8 Section contains 2.8 million tonsmillion tons

nn Average quality is 3.4% Average quality is 3.4% ash, 0.83% sulfur, and ash, 0.83% sulfur, and 15300 MAF BTU15300 MAF BTU

Crupperneck "B" Section

Area (acres)

Area (%)

Thickness (feet) Clean Tons

Measure 572 92 3.1 3,216,877

Indicated 48 8 3.3 276,187

Inferred 0 0 0 0

Total > 3’ (Average) 620 100 3.2 2,842,247

Average Quality

% Recovery % Ash % Sulfur MAF BTU

Raw 100% 12.07 0.98 15300

SG 1.40 76.54 3.39 0.83 15300

SG 1.50 77.85 4.57 0.9 15300

SG 1.60 80.98 5.75 0.9 15300

Reserve Classification MapReserve Classification Map

Thickness MapThickness Map

Percent Recover at SG = 1.40Percent Recover at SG = 1.40

Percent Ash at SG = 1.40Percent Ash at SG = 1.40

Percent Sulfur at SG = 1.40Percent Sulfur at SG = 1.40

GeologyGeologynn 81 core holes drilled between 1922 and the mid 1970’s (39 with 81 core holes drilled between 1922 and the mid 1970’s (39 with

quality data)quality data)

nn 18 coal section were added based on old works18 coal section were added based on old works

nn New River FormationNew River Formation

nn Also contains Fire Creek and Beckley SeamsAlso contains Fire Creek and Beckley Seams

nn Highly variable thicknessHighly variable thickness

nn Many structural challengesMany structural challenges

Overburden ThicknessOverburden Thickness

Bottom ElevationBottom Elevation

Roof GeologyRoof Geology

Floor GeologyFloor Geology

Geologic Cross SectionGeologic Cross Section

Strip LogsStrip Logs

Inby EquipmentInby Equipment

nn 1 1 –– Eimco DashEimco Dash--0 CM0 CM

nn 2 2 –– Stamler Battery HaulerStamler Battery Hauler

nn 1 1 –– Fletcher Low Pro RR IIFletcher Low Pro RR II

nn 1 1 –– DBT UnDBT Un--AA--Trac ScoopTrac Scoop

nn 1 1 –– Stamler Feeder BreakerStamler Feeder Breaker

Outby EquipmentOutby Equipment

nn 2 2 –– 10 Man Mantrips10 Man Mantrips

nn 3 3 –– 2 Man Mantrips2 Man Mantrips

nn 1 1 –– Underground TrailerUnderground Trailer

nn 2 2 –– Rock DustersRock Dusters

nn 1 1 –– DBT UnDBT Un--AA--Trac ScoopTrac Scoop

Outside EquipmentOutside Equipment

nn Stacker BeltStacker Belt

nn Trucks (Contracted)Trucks (Contracted)

nn FrontFront--end Loader (Contracted)end Loader (Contracted)

nn Dozer (Contracted)Dozer (Contracted)

nn Company FCompany F--350, Quad Cad, Long Bed, Dually, Used350, Quad Cad, Long Bed, Dually, Used

Ground ControlGround Controlnn Designed using ARMPSDesigned using ARMPS

nn 7 7 –– entry mains and panels when possibleentry mains and panels when possible

nn 2 intakes, 2 returns, 3 neutrals2 intakes, 2 returns, 3 neutrals

nn The pillar sizes were selected to provide a minimum SF The pillar sizes were selected to provide a minimum SF of 1.5 required by MSHA in short term areas.of 1.5 required by MSHA in short term areas.

nn Width to height ratio is greater than 4Width to height ratio is greater than 4

Cranberry SectionCranberry Section

nn Maximum Seam Height = 5 ft.Maximum Seam Height = 5 ft.

nn Maximum Cover = 500 ft.Maximum Cover = 500 ft.

nn Pillar Size 55’ X 75’Pillar Size 55’ X 75’

nn Development SF = 2.7Development SF = 2.7

nn Abutment Load SF = 1.53Abutment Load SF = 1.53

Crupperneck “A” SectionCrupperneck “A” Section

nn Maximum Seam Thickness = 9 ft.Maximum Seam Thickness = 9 ft.

nn Maximum Cover = 700 ftMaximum Cover = 700 ft

nn Mains Pillars = 60’ X 120’ (SF = 2.39)Mains Pillars = 60’ X 120’ (SF = 2.39)

nn Rooms Pillars = 60’ Centers (SF = 1.54)Rooms Pillars = 60’ Centers (SF = 1.54)

Crupperneck “B” SectionCrupperneck “B” Section

nn Maximum Seam Thickness = 4 ft.Maximum Seam Thickness = 4 ft.

nn Maximum Cover = 600 ft.Maximum Cover = 600 ft.

nn Mains Pillars = 55’ X 75’ (SF = 2.71)Mains Pillars = 55’ X 75’ (SF = 2.71)

nn Rooms Pillars = 50’ X 50’ (SF = 1.60)Rooms Pillars = 50’ X 50’ (SF = 1.60)

Roof SupportRoof Support

nn Calculated assuming minimum requirementsCalculated assuming minimum requirementsnn Designed to a SF of 1.6Designed to a SF of 1.6nn Various types and strengths of bolts should be Various types and strengths of bolts should be

approved in planapproved in plannn 4 ft, 5/8 in, Grade 40, 4 in bearing plate fully 4 ft, 5/8 in, Grade 40, 4 in bearing plate fully

grouted resin boltsgrouted resin boltsnn 4 ft spacing4 ft spacingnn 5 or 6 ft cable bolts used in intersections in lieu 5 or 6 ft cable bolts used in intersections in lieu

of timbers when pulling pillarsof timbers when pulling pillars

Roof SupportRoof Support

Roof Bolt Parameters

Entry Width 20 f t

Row Spacing 4 f t

Bolts/Row 4 ft

Rock Density 162 lb / ft^3

Bolt Length 4 f t

Immediate Roof

Thickness

1 f t SS or Shale

2 f t SS or Shale

5+ f tCompetent Shale or

Sandstone

Bolt Loading 7776 lbs

Bolt Capacity 12272 lbs

Bolt Diameter 0.625 in

Steel Strength 40000 psi

Safety Factor 1.57817

Ventilation Ventilation

nn Single fan located at the drift mouthSingle fan located at the drift mouth

nn Blowing system (why not exhausting?)Blowing system (why not exhausting?)

nn Assumed 25,000 cfm required on section (minimum is Assumed 25,000 cfm required on section (minimum is 9,000 cfm)9,000 cfm)

nn Assumed 75,000 required at fan (50,000 cfm leakage) at Assumed 75,000 required at fan (50,000 cfm leakage) at a pressure of 3.5 inches of watera pressure of 3.5 inches of water

Ventilation DiagramVentilation Diagram

ProductionProductionnn Average production is 250 ft per shift (750 ft per day)Average production is 250 ft per shift (750 ft per day)

nn Minimum mining height is 32 inchesMinimum mining height is 32 inches

nn Average annual production 370,900 clean tonsAverage annual production 370,900 clean tons

nn 250 operating days per year (5250 operating days per year (5--day week)day week)

nn 3 working shifts per day (belt moves on shift)3 working shifts per day (belt moves on shift)

nn Scheduled to begin on May 9Scheduled to begin on May 9thth, 2009, 2009

Cut SequencesCut Sequences

7 – Entry Cut Sequence

Pillar Recovery Cut Sequence

Timing MapTiming Map

HaulageHaulage

nn Coal loaded onto 42” belt system by a feeder breakerCoal loaded onto 42” belt system by a feeder breaker

nn Coal is loaded at a rate 360 tphCoal is loaded at a rate 360 tph

nn Average individual belt length is 3000 ftAverage individual belt length is 3000 ft

nn Belt speed is 450 ft / minBelt speed is 450 ft / min

nn Average belt hp requirement is 100 HPAverage belt hp requirement is 100 HP

Water HandlingWater Handling

nn Quantity used by mine is 100 gpmQuantity used by mine is 100 gpm

nn Minimum 100 gpm required to be pumped from Minimum 100 gpm required to be pumped from minemine

nn Double outgoing capacity (continuous pumps)Double outgoing capacity (continuous pumps)

nn Underground ReservoirUnderground Reservoir

Pumping DiagramPumping Diagram

Misc. Mine ServicesMisc. Mine Services

nn Contracted EmployeesContracted Employees

nn Rockdusting (On Shift)Rockdusting (On Shift)

nn Mine Rescue TeamsMine Rescue Teams

nn Self Contained Self RescuersSelf Contained Self Rescuers

nn Underground Rescue ChambersUnderground Rescue Chambers

Mine PowerMine Powernn Three phase power lines must be extended 6500 ftThree phase power lines must be extended 6500 ft

nn Power is supplied at 23 kVPower is supplied at 23 kV

nn Stepped down to 7200 V at 4000 kVA Substation to enter mine Stepped down to 7200 V at 4000 kVA Substation to enter mine

nn Section requires 750 kVA Section requires 750 kVA

nn Belt heads requires 100 kVABelt heads requires 100 kVA

nn Outside requires 1500 kVAOutside requires 1500 kVA

Power DiagramPower Diagram

Surface FacilitiesSurface Facilitiesnn Mobile coal prep plant (40’ X 12’ X 48’)Mobile coal prep plant (40’ X 12’ X 48’)

nn Mine office trailerMine office trailer

nn Changing facility (bath house waiver)Changing facility (bath house waiver)

nn PortPort--AA--JohnJohn

nn 18.6 acre refuse area (LOM)18.6 acre refuse area (LOM)

nn Sediment ditch and pondSediment ditch and pond

Coal Preparation PlantCoal Preparation Plantnn Assumed 90% efficiency Assumed 90% efficiency

nn 100 TPH feed from LSM100 TPH feed from LSM

nn 93.7% coarse (+28M) cleaned at SG = 1.3593.7% coarse (+28M) cleaned at SG = 1.35

nn Refuse then cleaned at SG = 1.60Refuse then cleaned at SG = 1.60

nn 3.7% fine (+28M 3.7% fine (+28M –– 250 Microns) cleaned at SG = 1.60250 Microns) cleaned at SG = 1.60

Coal Preparation PlantCoal Preparation Plant

Surface FacilitiesSurface Facilities

Permitting and DevelopmentPermitting and Development

nn Permits submitted to WVDEP, MSHA, WVOMHST (1 Permits submitted to WVDEP, MSHA, WVOMHST (1 year lead time)year lead time)

nn Five stages of development:Five stages of development:nn Stage 1: PermittingStage 1: Permittingnn Stage 2: Extend road and powerStage 2: Extend road and powernn Stage 3: Site prep and faceStage 3: Site prep and face--upupnn Stage 4: Office and plant constructionStage 4: Office and plant constructionnn Stage 5: Full productionStage 5: Full productionnn Four month lead timeFour month lead time

Gantt ChartGantt ChartFigure PD.1 - Gantt Chart

Stage1st

Quarter 2008

2nd Quarter

2008

3rd Quarter

2008

4th Quarter

2008

Jan-09

Feb-09

Mar-09

Arp-09

May-09

1 Reserve Acquisition

1 DEP Permits

1 MSHA Plans

1 OMHST Plans

2 Road Expansion

2 Power Line Extension

3 Face-up Construction

4 Plant Construction

4 Mine Office Construction

4 Shop Construction

5 Full Production

EconomicsEconomics

nn $6 million initial capital $6 million initial capital nn Borrowed at 15% paid over LOMBorrowed at 15% paid over LOMnn Operating Cost is $44.10 per ton delivered to Operating Cost is $44.10 per ton delivered to

Calgon and $35.35 per ton delivered to barge Calgon and $35.35 per ton delivered to barge loadoutloadout

nn Sale price assumed at $60 per ton (MET) and Sale price assumed at $60 per ton (MET) and $40 per ton (Steam)$40 per ton (Steam)

nn IRR = 55% IRR = 55% nn NPV (7%) = $15.5 millionNPV (7%) = $15.5 million

Net Cash FlowNet Cash Flow

$(4,000)$(3,000)$(2,000)$(1,000)

$-$1,000$2,000$3,000$4,000$5,000$6,000$7,000

0 1 2 3 4 5 6 7 8 9 10YEARS

Dolla

rs (0

00)

NET CASH FLOWDCF by Year (7%)

RecommendationsRecommendations

nn Drill two core holes to accurately locate washoutDrill two core holes to accurately locate washout

nn Assume only Cranberry Section is accessibleAssume only Cranberry Section is accessible

nn Minimize capital expense to minimize riskMinimize capital expense to minimize risk

nn Complete a full feasibility study Complete a full feasibility study

Questions?Questions?