NWR is pursuing several projects and prospects in the Czech Republic and Poland which form part of a broader growth strategy in Central and Eastern Europe. The Company’s current development projects are described in more detail below.
Dębieńsko
Probable reserves 189.9 MM tons
The Dębieńsko mine is located in southern Poland, in the northwestern part of the Upper Silesian basin, 40 kilometres from the border with the Czech Republic. The site holds probable reserves of approximately 189.9 million tonnes of coal and the geological conditions are very similar to that of our current active operations.
In early 2006 NWR began to develop the project with the aim of accessing and mining seams in the region between 750 and 1,400 metres below surface. The Company prepared an extensive mining plan and conducted discussions with the relevant constituencies including mining authorities and local municipalities. NWR’s mining concept, which is fully consistent with the local zoning plans, was accepted by the Polish Ministry of Environment in September 2007. The relevant regional authority, the office of the Katowice Governor, also approved the Environmental Impact Assessment in early 2008.
In June 2008 NWR received a 50-year mining licence to mine coal in Debiensko from the Polish Ministry of Environment. Our Polish subsidiary, NWR KARBONIA began drilling holes to establish shaft conditions of the area in November 2008.
The granting of the licence was a milestone in our strategy to increase long-term production and add to our reserves through regional expansion and organic growth.
Our mining consultant for the project is JT Boyd, which is exploring various international shaft sinking and engineering approaches that could help minimise the development time necessary to commence mining at Dębieńsko.
Morcinek
Morcinek is located in the Upper Silesian coal basin in southern Poland, near the boarder with the Czech Republic. Morcinek is near the area of a former mining district, Kaczyce. Mining activities in the area were previously performed by carious companies, the last being Jastrzebska Spółka Weglowa (“JSW”) in the late 1990s. In the following 12 years only 10 million tonnes of coal was extracted. Production at this mine was terminated in 1998 and the mine was liquidated at the end of 1999.
NWR initiated the Morcinek project in 2002 with the initial objective of accessing coal in the southern part of the mining district using mine and surface infrastructure from the ČSM mine. We have since acquired the relevant documentation and exploration concessions to enable us to prepare the conceptual study of the area. NWR has also acquired a licence to extract coalbed methane from the area.
In August 2008, the Czech and Polish governments signed a treaty on cross-border mineral exploration enabling companies from both countries to operate in the boarder area. The signing of the treaty, which has been ratified by the Czech parliament and is awaiting ratification by the Polish authorities, created the legal framework needed to enable the Morcinek project to move forward. In the first phase of the Morcinek project, NWR intends to access coal from the existing facilities.
In October 2007, we signed a letter of intent with JSW, which outlines the objectives of both parties and key milestones of the project. NWR believes that this partnership is mutually beneficial. The second phase of the project envisions the Company sinking a new shaft within the district territory and opening an access route to the central parts of the mining district.
Frenštát
Frenštát is located 30 kilometres south of Ostrava. The resource was identified and preliminary drilling was performed in the 1980s. However, the development was put on hold in the late 1980s following the collapse of communism.
NWR has the sole right to develop this mine. We are currently evaluating the economic feasibility of developing the resources, taking into account factors such as the quantity and quality of resources at Frenštát, the length of time required to develop these resources, the Company’s ability to obtain any relevant mining or other governmental permits and to work with any relevant local and governmental authorities.
Frenštát is not an operational mine and the development of Frenštát into an operational mine will require mining and environmental permits, approvals from and agreements with municipal authorities, and significant capital expenditure.
