Due to its high moisture content and propensity for self-heating, brown coal is primarily used as a fuel for mine-mouth power stations. In order to capture a share in the emerging upgraded brown coal market place, Mantle formed a joint venture with clean coal technology company Exergen Pty Ltd (Exergen).
Exergen has developed Continuous Hydro-Thermal Dewatering (CHTD), a technology that transforms low grade, high moisture brown coal into cleaner utilisation products with lower carbon dioxide emissions. The process is seen as an “enabling technology” for a number of coal conversion technologies such as coal to gas, coal to oil and coal to chemicals and fertilizers. CHTD is highly efficient because water is physically separated from the coal in the liquid state, rather than being removed through the highly energy-intensive process of evaporation.
A CHTD autoclave consists of concentric pipes placed in a mine shaft or bore-hole to a depth of 1 km.
The weight of the column of coal-water slurry circulating through the autoclave provides sufficient pressure to prevent boiling at a temperature of 300oC at the bottom of the autoclave. A reaction takes place changing the composition and structure of the coal and allowing significant portions of coal moisture to be efficiently removed (Figures 23 and 24).
Figure 23: CHTD process schematic. Figure 24: CHTD autoclave.
Upgrading brown coal in this manner has significant environmental benefits as a result of the reduction in carbon emissions that result from the use of the upgraded coal when compared with using the raw coal. In addition, the coal changes chemistry from water attracting to water repelling and can be transported in slurry form making it a very safe product to handle.
Exergen expects CHTD coal would be used in next generation, state of the art power stations being constructed in India. This type of power station emits 30 - 40% less carbon dioxide than Victoria’s existing coal-fired power stations. CHTD also brings value to a number of downstream uses for upgraded brown coal, including char, fertilisers, pyrolysis oils and liquid fuels. Liquid fuels are currently being developed for use in Direct Injection Coal Engines (DICE).
CHTD slurry could be pumped through pipelines to processing facilities at ports, where it could be dewatered and processed into valuable commercial products. Preferred pipeline routes from the Latrobe Valley to the Port of Hastings and from Bacchus Marsh to the Port of Geelong have been defined (Figure 25).
Figure 25: Exergen’s proposed export infrastructure map.
MANTLE MINING CORPORATION LIMITED ABN 70 107 180 441 32 Figure 26: Mantle’s Victorian coal project locations.
During the year, Exploration Licences (ELs) 5336, 5338, 5428 and 5429 were all granted and EL 5210 successfully renewed (Figure 27).
Figure 27: Mantle’s Latrobe Valley coal project tenements.
Mantle’s long term plan is to enable a transition from unenhanced (raw) brown coal utilisation for power generation in the Latrobe Valley into sustainable renewable energy production via the development of combined solar pumped - hydro generation systems. This would allow for a stepwise move from carbon intensive generation, with low socio economic impact, to renewable energy generation.
Mantle intends to seek an allocation and determine the extent of deeper black coal seams under the Latrobe Valley (S7 Exempt Area in Figures 26 and 27) with a view to establish underground mining.
Once mined out, the underground reservoir walls would be concrete seal lined to prevent leakage and hydraulically linked to surface dams (old brown coal open cuts in the S7 Exempt Area) via high efficiency, reversible hydro-generators and pumps.
Solar generation, during the day, would be used to pump water from the underground reservoirs to the surface dams while that same water is used to generate hydro-electric power at night or during short high-demand peak periods when very profitable.
The Trafford (Mt Mulligan) Coal Project
A reprioritisation of Mantle’s projects toward its more advanced gold projects relegated the Mt Mulligan Coal Project to a lower priority for development. This strategically complex project demanded high ongoing costs for a project of less advanced prospectivity at a time when investor interest in thermal coal is low. As a result, the project tenements were abandoned and the project shut down.
Corporate Activities
During the financial year, the Company undertook the following capital raisings to fund its activities during the year.
Share Purchase Plan & Top-Up Placement
On 14 August 2014 the Company announced that it had issued 48,986,095 fully paid ordinary shares to raise a total of $860,000 under a Share Purchase Plan (underwritten to $750,000) and a Top-up Placement. The shares were issued at a price of $0.017556 each, which represented a 15% discount to the 5 trading day VWAP of Shares traded on ASX over the relevant pricing period.
Placement to Sophisticated Investors
On 8 January 2015, the Company raised $200,000 under a placement to an existing shareholder and long term supporter of the Company. The Company issued 16,666,667 fully paid ordinary shares at an issue price of $0.012 per share, together with 1.5 free attaching unlisted options for every 2 shares issued under the placement (being a total of 12,500,000 options). The options issued have an exercise price of $0.018 and an expiry date of 30 June 2016.
In addition to the above the Company also accepted a total of $150,000 in additional subscriptions on identical terms (other than that these subscriptions are subject to shareholder approval in accordance with the ASX Listing Rules), from related parties of the Company (Directors Ian Kraemer and Martin Blakeman). The funds are currently held as unsecured interest free loan funds pending shareholder approval which the Company intends to seek at the upcoming annual general meeting.
MANTLE MINING CORPORATION LIMITED ABN 70 107 180 441 34 the Company receiving subscriptions for a total of 60,768,834 Shares and 30,384,471 Options, raising $668,457 before costs.
The Company subsequently announced on 14 May 2015 that it had raised a further $220,000 (before costs) pursuant to the Shortfall Offer under the Rights Issue, after it issued 20,000,000 fully paid shares and 10,000,000 MNMOB Options to an existing shareholder and long term supporter of the Company on the same terms and conditions as the Rights Issue.
New funds raised with the support of existing and new shareholders were applied to acquisitions, exploration and mine development programs with the major area of expenditure during the year being on the delivery of a Mineral Resource estimate and positive Scoping Study for the Norton Gold Mine.
Director and Employee Fee Plan
At the Annual General Meeting held on 13 November 2014, Shareholders approved the Company’s Directors and Employees Fee Plan ("Plan") under which any full or part-time employee or director of the Company or any related entity or any nominee can elect to be paid some or all of the cash remuneration accrued to them by the issue of Shares.
During the year the Company issued a total of 8,589,670 fully paid ordinary shares under the Plan, in lieu of cash remuneration totalling $139,126. Subsequent to the end of the financial year, the Company issued a further 5,651,232 fully paid ordinary shares in lieu of cash remuneration totalling
$71,775 which was outstanding as at 30 June 2015.
As a result of the Plan, the Company has been able to reduce a portion of the cash costs of the Company, allowing a greater proportion of the Company's cash reserves to be allocated to advancing the Company's projects.
EXPENDITURE
New funds raised with the support of existing and new shareholders were applied to acquisitions, exploration and mine development programs. Corporate overheads continued to be held at low levels by the maintenance of a very flat management structure.
Mantle’s major area of expenditure during the year was related to delivery of a Mineral Resource estimate and positive Scoping Study for the Norton Gold Mine.
Refinement of Mantle’s project portfolio continued to focus on a “closer to production” position. The Trafford Coal project was shut down due to poor fundamentals.