Coal news and updates

Bens Creek Group plc provides reserve base evaluation update

Bens Creek Group plc, the owner of a metallurgical coal mine in North America supplying the steel industry, has provided an updated reserve base evaluation, undertaken by Marshall Miller & Associates, Inc. (MM&A), of its coal properties located primarily in Mingo County, West Virginia, USA.

Bens Creek engaged Marshall Miller to undertake a geological study and coal reserve base evaluation and provide a tonnage estimation on the Bens Creek properties in West Virginia and Kentucky (the MM&A report). The figures from the MM&A report have not been prepared in accordance with the AIM Guidance Note for Mining, Oil and Gas Companies (the AIM MOG Note) and the definitions used by MM&A are not equivalent to those used in the AIM MOG Note or a Standard. The MM&A report was issued to Bens Creek by MM&A on 15 June 2022.

The scope of the MM&A report covers:

• The existing in-production metallurgical coal mine set over 10 000 acres in the southern part of the state of West Virginia and the eastern edge of the Commonwealth of Kentucky (the Bens Creek Mine), which was subject to a competent person report (the 2021 CPR) that was produced by MM&A at the time of admission of the company's shares to trading on AIM in October 2021.
• The contiguous coal property adjacent to the Bens Creek Mine in Mingo County, West Virginia, covering 1200 acres and which was subject to a coal lease agreement being entered into between Ben's Creek Operations WV LLC (BC Operations) and M.G.C., Inc. on 15 December 2021.
• The contiguous coal property which was subject to BC Operations entering into a coal sub-lease agreement with Star Ridge Land, LLC, an affiliate of Integrity Coal Sales, Inc., the company's existing offtake partner, on 13 April 2022. The property relates to two parcels of land covering approximately 2640 acres in Mingo County, West Virginia.

The MM&A report supplements the previous JORC compliant CPR produced by MM&A in 2021 as part of the admission of the company's shares to trading on AIM. However, this MM&A report has not been prepared to the standards set forth in the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (JORC) or in accordance with an appropriate Standard as set out in the AIM MOG Note. Bens Creek will be commissioning Marshall Miller to prepare a mineral resource and reserve update in accordance with JORC standards as soon as practicable.

The updated resource and reserve estimates that are to be prepared by MM&A under JORC standards will not be comparable to the reserve base estimate set out in this announcement. The updated report to be completed by MM&A in accordance with JORC standards will focus upon tonnages delineated as ‘contingent reserve’ (approximately 5.2 million t) in the MM&A report. The majority of tonnages delineated as contingent resource do not contain sufficient supporting exploration and/or analytical quality information required for reporting in accordance with JORC standards at the current time. Consideration of contingent resources under JORC standards will require Bens Creek to undertake a substantial exploration campaign to obtain such information and will therefore not be included in the mineral resource and reserve update to be prepared by Marshall Miller in accordance with JORC standards as highlighted above. Furthermore, the reserve base estimate set out in this announcement is not directly comparable to the mineral reserves and resources figures which were set out in the 2021 CPR completed in accordance with JORC standards.

The reserve base evaluation conducted by MM&A effectively represents an inventory of tonnage contained on the three subject properties, set out above, based upon geological criteria. A combination of additional exploration, financial analysis and engineering studies will be required prior to the consideration of any of the tonnage in accordance with JORC standards. Recoverable tons expressed by MM&A are defined to be contingent resources and contingent reserves, both of which represent terminology developed by MM&A. Tonnages expressed by MM&A in the reserve base analysis are not directly comparable to tonnages expressed in former or future AIM or JORC compliant studies. Definitions introduced by MM&A as part of this reserve base analysis and summarised below do not transition to definitions recognised by JORC or the AIM MOG Note.

The direction and focus of the reserve base evaluation by MM&A was to maximise contour mining with associated highwall mining.

Key points

• Results of the reserve base evaluation identifies that the Bens Creek properties contain an estimated in-place reserve base of approximately 92.7 million t (all tonnes reported on a dry basis prior to the application of mine recovery and wash recovery).
• Of the total in-place reserve base, 33.6 million t are estimated to be recoverable, of which 5.2 million recoverable t are classified as contingent reserve and 28.2 million recoverable t are classified as contingent resource.
• The estimated recoverable tonnage of 33.6 million has been classified by permit status, with 2.6 million recoverable t of ‘permitted’ coal and 31 million recoverable t of ‘not permitted’ coal.
• The estimated recoverable tonnage of 33.6 million can be further analysed as:
• 4.5 million recoverable t are classified as potentially contour and highwall mining.
• 7.6 million recoverable t are classified as surface-mineable (point removal and area mining).
• 21.5 million recoverable t are classified as underground mineable.
• Of the total tonnages, 100% is leased coal.
• A total of sixteen seams and associated benches have been identified as exhibiting surface and/or deep mineable potential within the evaluation.

Adam Wilson, CEO of Bens Creek, commented: “We are delighted that the work undertaken by Marshall Miller has confirmed our expectation of improved coal reserves as a result of our recent coal lease agreements with M.G.C. Inc. and Star Ridge combined with our original property. The identified estimated in-place reserve base of 92.7 million t, with an estimated recoverable tonnage of 33.6 million, should ensure that our mining targets are able to extend the life of our mining operations to meet the global demand for metallurgical coal.”

“We are commissioning MM&A to prepare a JORC compliant report as soon as practicable. In due course we will also undertake exploration work with the aim of proving up the overall resource base in accordance with JORC standards.”