Cardero Resource Corp. (“Cardero” or the “Company”) (TSX: CDU, NYSE MKT: CDY) provides an update on the Environmental Assessment process for the Carbon Creek Metallurgical Coal project. The Canadian Environmental Assessment Agency (“CEAA”) and the British Columbia Environmental Assessment Office (“EAO”) recently announced the finalization of a Memorandum of Understanding (“MOU”) to enable efficient and timely application of the substitution provisions in the Canadian Environmental Assessment Act 2012 (“substitution”).
The Company also announces that, following extensive review and consultation, the BC Ministry of Energy, Mines and Natural Gas has granted Cardero Coal Ltd. authorization to conduct a geotechnical drill program at its Carbon Creek Metallurgical Coal project.
Details of Substitution Provisions
Under the current system, proposed projects in British Columbia undergo two separate, but parallel, Environmental Assessments: a Federal assessment under the CEAA and a Provincial one under the EAO. The proposed substitution process is aimed at eliminating duplication by allowing the EAO to conduct a single review which meets both Federal and Provincial requirements for assessment and consultation.
To initiate the substitution process for a mine project, the BC Provincial government must make a request to the Federal government. At the conclusion of the substituted assessment process, the respective Federal and Provincial Ministers will reach separate decisions, based on review of the single provincial Environmental Assessment.
Carbon Creek Selection for Substitution
It has previously been determined that the Carbon Creek project is subject to an environmental assessment by both the Federal and BC Provincial authorities. On March 6, 2013, the EAO submitted requests to the Federal government to conduct substituted environmental assessments on only two mine projects; Cardero Coal’s Carbon Creek Metallurgical Coal project and Xstrata Coal’s Sukunka Coal project. Subsequent to a public review period, the request was approved by the Federal Environment Minister on April 15, 2013.
Guy Gilron, Vice President of Environmental and Regulatory Affairs of Cardero Coal, commented, “This one-project-one-assessment approach will facilitate an effective, efficient and streamlined review process, at the same time ensuring the same level of rigorous review and consultation with government agencies, First Nations, communities and other stakeholders.”
Mr. Gilron is a senior environmental professional with 22 years’ experience in numerous projects in the Americas, Asia and Australia. He has extensive knowledge of environmental and community relations issues related to the mining industry, with recent coal operations experience as the Director, Environmental Science, for Teck Resources Limited.
Additional Information on Substitution
Link to Provincial news release on substitution application:
Link to Federal Minister’s decision to proceed with substitution process:
Geotechnical Program Details
Feasibility-level design of surface facilities for the Carbon Creek project will be completed as part of the bankable feasibility study presently underway. Geotechnical drilling will provide confirmation that the area selected for these facilities is suitable for construction of the coal processing plant, covered stockpiles, conveyors and ancillary buildings. The surface facilities will be located in the northern portion of the Carbon Creek site, close to Carbon Inlet, where clean coal products will be loaded onto a barge for transportation on Williston Reservoir to the railhead at Mackenzie.
A total of 16 shallow geotechnical drill holes and 16 shallow trenches will be completed for geotechnical analysis and assessment of site suitability. Eight of the drill holes will be maintained as groundwater monitoring wells as part of ongoing hydrogeological baseline monitoring studies. All other disturbance will be reclaimed and re-vegetated. The Company’s ability to carry out the proposed program is subject to raising the necessary funds and the start date has not yet been determined.
About Carbon Creek
The Carbon Creek Metallurgical Coal Deposit is the Company’s flagship asset. Carbon Creek is an advanced metallurgical coal development project located in the Peace River Coal District of northeast British Columbia, Canada. The project has a current reserve of 121 million tonnes, included within a 468 million tonne measured and indicated resource, of ASTM Coal Rank mvB coal. Mineral resources are not mineral reserves and there is no assurance that any of the additional mineral resources that are not already classified as reserves will ultimately be reclassified as proven or probable reserves. Mineral resources which are not mineral reserves do not have demonstrated economic viability. Having completed acquisition of the project in June 2011, the Company released results of an independent preliminary economic assessment in December 2011, followed by a Prefeasibility Study (“PFS”) in September 2012. The PFS estimates an undiscounted cash flow of $2.2 billion, an NPV8 of $633 million, and an IRR of 24% (all on a post-tax, 75% basis). The Company is currently undertaking a bankable feasibility study on the project.