Peace River delivers

• Trend mine

Coal is British Columbia’s top mineral product by value, with 10 mines operating–five in northeast B. C. near Fort St. John, and another five east of Cranbrook in the southeast. One of the northeast mines–the TREND MINE–achieved commercial production at the beginning of this year. Fortunately for producers, the price of coal has taken off this year, with average quality metallurgical coal trading around $200/tonne (as of late April) compared with $100/tonne a year ago.

Trend is the first producer for the Peace River Coal Ltd. Partnership. PRC was formed at the end of 2006, joining all the northeast B. C. metallurgical coal assets of three companies in one entity. The operating company is Peace River Coal Inc., a subsidiary of London, U. K.-based Anglo American plc, which now owns a 73.9% interest in the partnership. The other two partners are NEMI Northern Energy & Mining Inc. of Vancouver (12%) and Hillsborough Resources Ltd. of Vancouver (14.1%).

The Trend operation south of Tumbler Ridge has actually been producing metallurgical coal since 2006, when it was known as TREND SMALL. Late that year, the prep plant was modified by adding a fines wash circuit, which was commissioned by year end. The project received a full mine permit the beginning of 2007 to increase the production rate to 2 million tonnes (t) per year of clean product. By June 2007, the mine had reached pre-commercial production and began to ramp up the pit operations to commercial production, which was achieved on Jan. 1, 2008.

The total mine production in 2007 from Trend was 742,000 t, including 515,000 t of metallurgical and 227,000 t of byproduct thermal coal. The mine’s production forecast for 2008 is 2 million t of run-of-mine coal, including 1.3 million t of metallurgical and 200,000 t of thermal coal product. The mine expects to reach a level of 150,000 t/month by year-end (an annual salable production capacity of 1.8 million t of metallurgical coal). All coal produced from the Trend mine is being marketed by Anglo Coal Marketing Ltd.; PRC says that customer demand for the Trend coal products is very strong.

Peace River has carried out a number of improvements in the past year. The Trend operations switched from diesel generators to permanent power from the BC Hydro grid early in 2007, bringing significant savings. A dedicated haul road from the mine to the Trend rail loadout is expected to be complete in Q2 2008; this will save on coal haul costs.

The operation has leased two rail car sets for transporting its coal to Ridley Terminals for shipment across the Pacific, improving shipping reliability and reducing rail costs. An automated rail-car-loading system is currently being commissioned at the loadout, which will reduce train loading times and improve load distribution and create consistent weights.

Upgrades in the wash plant early in 2007 have resulted in a decrease in total moisture and improvement in product quality control. A further wash plant upgrade is currently under review, which may incorporate a full wash cycle, improving throughput and yield. If approved, this modification would be complete by Q4 2008, giving the plant an annual capacity of 1.8 million t.

While improvements in 2007 have allowed the plant to achieve its targeted throughput, the production of raw coal has progressed more slowly, due mainly to equipment and labour availability.

As well as Trend, PRC holds the ROMAN AND HORIZON PROPERTIES. The partnership has a five-year plan to ramp up total production from the Trend mine and adjacent properties to 6 million t/year. A major drill program–80 holes totaling 2,100-metres–was conducted early in 2008 on the Roman property, adjacent to the Trend mine, and a feasibility study has begun. A Roman pit is expected to add 4 million t of run-of-mine production per year commencing in 2009-10. An exploration program is also underway at the Horizon block. The plan at Horizon is a combination open pit and underground mine with a target production of 2 million t, starting up in 2010.

PRC also has a 50% interest in the BELCOURT SAXON COAL PROPERTIES. The results of a prefeasibility study are expected shortly, focusing on developing the Belcourt North and South blocks with planned annual production of more than 6 million t of run-of-mine coal.