Overview
AMMG, through its subsidiary Canning Coal Pty Ltd, has been actively exploring and extending its tenement base in the Canning Basin and how has seven tenement applications extending over 1,402 square kilometres, which are 100% owned by AMMG.
The Canning Basin is emerging as a coal province in the northeast of Western Australia. As previously interpreted by government geological surveys, the exploration tenure has the potential to contain the target unit for coal, 'Lightjack formation', the host of other reported coal seam intersections.
The Lightjack formation hosts Rey Resources' 305.8Mt thermal coal total P1 resource, 229.6Mt thermal coal total P2 resource, located northwest of AMMG's application tenure within the Canning Basin.
The Canning Basin area is generally under-explored, particularly for coal. Previously, exploration was directed on areas showing surface or near surface signs of coal.
Along with the potential port facilities at Derby Port, there is now potential for significantly larger ship loading facilities, with the WA Government having expressed support for the development of a deep water port just north of Derby at Point Torment.
During the year, AMMG signed a MOU with a Chinese exploration bureau, Anhui Lianghuai Pty Ltd, a local wholly owned subsidiary of the Anhui Provincial Bureau of Coal and Geology.
The signing of the MOU follows a series of discussions and initial due diligence, including a number of trips by AMMG to the Anhui head office in Hefei and a number of trips by Anhui to AMMG's WA-based projects.
The MOU provides both parties with the framework to work together over the next few months to determine whether agreement can be reached on the terms of a direct capital investment by way of a share placement in AMMG or its subsidiary, Canning Coal.
The MOU further supports the potential for a Heads of Agreement for a joint venture for the development of the Canning Coal project.
A further follow up trip to Anhui's head office was made in November 2011 by AMMG delegates to progress the objectives of the MOU.
Canning Coal Project Map