NIRIHUAU PROJECT, RIO NEGRO
LOCATION: Pico Quemado, Rio Negro (1,400km southwest of Buenos Aires)
- High priority prospect.
- Tertiary synclinal Nirihuau Basin – southern Pico Quemado and northern Chenqueniyeu.
- 6 main seams with 12m aggregate coal thickness dipping 10-30 degrees. 22kms strike length.
- Drilling and small scale mining in WWII era.
- Substantial drilling by YCF in 2005 delineating large coal resources.
- moisture — 2‐5%
- ash — 10‐25%
- volatiles — 24‐33%
- calorific value — 6000‐7400 Kcals/kg
- sulphur — 0.2‐0.6%
- crucible swelling index — up to 5
- mean maximum reflectance — 0.56‐0.68%
Above: Structural and geological map of the Nirihuau project area
A total of six thick seams have been identified in the sedimentary sequence (in parts showing a cumulative thickness of 12m coal), each exposed from the surface to shallow depths affording potential for easy development. As outlined in the ASX release of 26 August 2015, Dark Horse Resources has an Exploration Target for the Pico Quemado and Basin projects of approximately 75 million tonnes to approximately 125 million tonnes of coal with an energy (calorific) range of approximately 6,000 Kcals/kg to approximately 7,400 Kcals/kg.
The coal is high in energy, with moderate ash and low sulphur, which presents the parties with an outstanding opportunity to generate base load electricity.
Above: Meeting of Dark Horse Resources and Trendix representatives with Rio Negro Government officials.
Power generation project:
Dark Horse intends to join with a Developing Partner to construct an Advanced Ultra-Supercritical 750 -1,500MW mine mouth coal fired power station at the Pico Quemado project site in Rio Negro Province, Argentina.
The project proposal has been received favourably by the Rio Negro Government and would provide inexpensive and clean base load power to the Argentine national power grid.
Electricity Sector in Argentina
Argentina has approximately 29,000MW of installed capacity, 1,500MW of which is considered peak power and 3,500MW of which is over 30 years old and nearing the end of its life. Demand is reaching 24,000MW in peak periods with limited to no spare capacity. This in turn has caused brown outs across the country. Following the 2001 financial crisis in Argentina, measures were implemented to shield the Argentine consumers from substantial increases in electricity and gas prices caused by the devalued Argentine peso. Today, the Government is still heavily subsidising the electricity sector and importing expensive hydrocarbons to generate electricity. Dark Horse Resources` believes there is an opportunity to generate cost-effective electricity though coal fired power without the need for government subsidies.
The construction of the power station would be based on state of the art Ultra‐Supercritical (USC) technology, which requires less coal per megawatt‐hour (lower carbon dioxide and sulphur emissions) and reduced fuel consumption, which results in lower overall operational expenses. The parties will look to utilising latest commercially‐viable technologies and equipment providers to minimise and control emissions, and will also investigate carbon capture and sequestration and offsetting strategies including fertiliser generation through algae farming.
MARAYES COAL PROJECT, SAN JUAN
LOCATION: Marayes, San Juan (210km northeast of Mendoza)
In late 2015, the Company expanded its tenement holdings in the Marayes Coal Project by executing an Option to Purchase with the individual owner, Mr Alberto Herrera, for an interest of 100% of the lease covering the main historical Marayes mining area in the San Juan province of Argentina. The lease area, marked in pink in Figure 2 (320-H-2006), is located in the heart of the known coal occurrences at Marayes and, as such, is a significant acquisition for Dark Horse. The lease is 4,548 hectares and includes the old Rickard and Rodolfo mine shafts and associated inclines (refer Figures 3 and 4 below). Historical records make reference to the Mines of Rickard, Rickard Extension and Eloisa; and Shafts – Rodolfo and Olivero; and Galleries (drifts) - Rickard, Pagni and Larrosa. These are shown in detail on old surveyed maps, and extend over several square kilometres of area. Coal was mined during the 40’s and 50’s and used for steam raising and metallurgical purposes.
The seams mined at Rodolfo are believed to be at a depth of 12m to 13m and through a series of galleries (inclines), mapped for a total length of 430m. The seams mined are believed to be a part of the lower I and II sequence. There are two distinct coal seams of around one meter in thickness within an interbanded sequence (carbonaceous mudstones), with dips between 6 and 10 degrees.
Dark Horse has traced some thin carbonaceous/coaly outcrops on surface for a distance of some 4kms northwest of the Rickard shaft, which indicate the presence of the seam sequence over a reasonable strike length. Outcrops consisted of thinly, interbanded carbonaceous mudstone and minor coal, some bright. Additionally, some similar carbonaceous/coaly outcrops exist some 500m south of Marayes township, indicating the continuity of the sequence in a southerly direction from the Rickard mining area. Regional geological maps show the carbonaceous sequence existing over a much larger distance to the north and south of Marayes (~40kms).
Applications previously lodged for four new Cateos (the Argentinean equivalent of Exploration Licences) are progressing and are expected to be granted in 2016. Excarb continues to explore opportunities to acquire further prospective coal areas in San Juan Province and also in selected areas in other provinces where coal occurrences are known (and where mining was carried out in the past).
Marketing studies continue for the Marayes project to determine the type and size of the potential market for Marayes coal. Preliminary results indicate a potential local demand in excess of 200,000 tonnes per annum within the study area. The two large cities of San Juan and Mendoza in this region host significant industry requiring energy for material processing, including cement plants, lime kilns, mining and mineral processing (San Juan Province hosts a number of major mining operations), agriculture (especially wine production), breweries and other general industry. Preliminary cost and pricing studies have indicated that Marayes coal could be price competitive with the existing fuel supplies, which are principally gas, oil, pet-coke and imported coal.