Natural Gas

A vital input in the production of Hot Briqueted Iron is thermal energy. Natural gas from nearby producing wells, or from a major gas transmission pipeline within 2 kilometres from the proposed mill site, is readily available.

Visit Alberta Energy’s Website for more information on provincial gas transmission.

Coal

Alberta Energy estimates that the Clear Hills has 240Mt of lignite coal overlying the ironstone deposit.[1] Ironstone made application for coal leases in the Clear Hills, and Alberta Energy has accepted the company submission.  The Company is unaware of the assumptions parameters and methods used to prepare this estimate.  The historical estimate does not use mineral resource categories set out in the NI43-101.  A qualified person has not done sufficient work to classify the historical estimate as a current mineral resource estimate.  Additional drilling would be required to verify the historical estimate as a current mineral resource and the Company is not treating the historical estimate as a current mineral resource.

Using coal in place of natural gas may significantly reduce energy operating costs in the iron reduction process required to produce metallic iron. Ironstone plans to implement environmentally-friendly integrated coal gasification technology to produce the energy needs of the mining and mill operations, and reductant gas. Any excess energy produced may be sold into the provincial electrical grid.

During the company’s field reconnaissance program in the Clear Hills in August 2010, Ironstone personnel located a surface exposure of the coal immediately west of its Rambling Creek block. A seam of exposed coal approximately 2 metres in thickness was sampled for upcoming ore beneficiation development.

An exposure of the Clear Hills coal overlying the ironstone

Ironstone is planning to conduct a limited coal delineation drilling program in 2012. Upon completion of its pre-feasibility study, the company will request Alberta Energy convert the applications to long-term coal leases.

[1]  Reserves of Coal, Province of Alberta (1999), AEU Statistical Series 31