A quick look at Conuma’s next few years

Wolverine is out of Coal. Conuma is moving into Quintette. Here’s a quick look at the next few years for the company.

Brule

Brule is almost at the end of its currently permitted reserve. The mine should keep going until the end of this year, and maybe into early next year, but don’t expect to see any coal coming out of there past February of 2025 for the next few years.

But that’s not the end of the mine, says Sullivan. “We’re doing exploration work at Brule,” he says. “Our most important project right now is commissioning the long-term water treatment system there that we have been building for all of this year. That will be commission in December or so. Once we get that up and running—the price tag on that will be about $60 million—but once that is finished, it’ll give us opportunity to continue into the future. But we’re going to have a period of probably two or three years where the activity there will be reclamation, water treatment and exploration while we’re putting together a plan. We’ve got a big investment there. Brule has been a fantastic product for its entire existence. The Japanese and Korean steel makers really seek that product and want it in the marketplace.

“We haven’t run out of coal. We’ve run out of permit. So we’re going to continue to explore in the Blind Creek watershed that’s now served by the new water treatment system. We were having a difficult time trying to permit while we were building the water treatment system at the same time. The regulatory agencies wanted to see progress on that water treatment system. Otherwise it was just very difficult for them to see a path forward on additional permitting, which I respect.

“If you look at the trend of selenium in the Blind Creek watershed, since we acquired it in 2016, it’s gone down to now where we’re achieving compliance. And going forward, we will achieve compliance. So at a significant cost, but in the right way. I mean, it’s, it’s the, it’s part of the bargain that extractive resource companies have with their local communities. You have to be able to do things in accordance with environmental regulations.”

Sullivan says that, while there was some discussion of highwall mining at Brule—where you come in from the side and drill into the coal reserve without removing the overburden—a few years’ back, that idea has been kyboshed. “You can’t highwall at Brule. What we typically see is the reserve dips significantly. So it may be flat for a few hundred feet, but about 500 feet in from the outside wall, it tends to bend away, down or up. That’s not ideal for a highwall mining machine, you’d like to be able to, to tram in a cutting head that’s on a long train that’s being pushed in, and about the biggest dip or incline that you can work with is about a five to seven degree dip or incline. Otherwise, you start to have difficulty. We’re look for reserves that have those characteristics where you can go 1000 feet in with below five degrees of dip or rise. We’ve got at Quintette, but not at Brule.

“If things work well, we’re hoping to get at least another 10 years out of Brule. There’s no doubt that the coal is there. We just figure out how we, how we make Brule phase two with the water problem in the rearview mirror.”

Sullivan hopes that Brule with be back up and running in a couple of years.

Quintette

Back in May, Sullivan was hoping to have the Little Windy pit up and running by July at the latest, but it wasn’t until September that all the permits were in place.

As a result, he’s a little gunshy over making predictions about when the rest of the mine will be coming on-stream.

That said, he’s hoping the mine will be fully operational by summer, 2025. “One of the things we did was a lot of the work that we did that helped Little Windy was also work that benefited the full restart. So a lot of the work around the plant—the impoundment, various environmental management plans, wildlife management plans—those all were done with the entire project in mind. So a lot of, a lot of that work benefited the full restart.”

He says the government regulators like to remind him that Conuma isn’t the only mining company in the country. “Every time we press for answers that we, we are reminded that we’re as much as we think that we are the only company they should be working on, they do have other proponents. It was certainly a frustration of ours that we couldn’t get things done sooner. But I think we got smarter in that process, and hopefully both Conuma and the regulators learned lessons that will help make this next round go smoother.”

But how much runway does the project have? “ There’s 3.2 million tons in there,” says Sullivan. “Maybe slightly more, so there’s 15 to 17 months of mining there before we start to run into the same problem we had at Wolverine where you’re, you’re getting down to the end of that resource without being able to start developing.”

He says after Little Windy, the plan is to move into the Big Windy pit, just west of the current area. “And then we have Window Pit. We’ve got 12 plus years of mining with those three areas and ideally, we want to be developing Big Windy before we run out of things to do in Little Windy. So the fact that we have 17 months does not mean we have 17 months to take it easy. We have three shovels that we that we purchased, and the third shovel was a development shovel so that we can go over to Big Windy and start the pre development work there.”

And past that, there’s still significant amounts of coal on the property. “Right now, our Chief Geologist is trying to figure out where that resource is and how much is there, but it’s very large.

“We’re going to develop it in conjunction with the communities that have an interest in making sure that we’re not mining for ten years and creating a problem for seven generations. That’s the test that we’ve been challenged with by the First Nations. That’s an awesome task.”

Mount Hermann

Before the purchase of Quintette came through, Mount Hermann was Conuma’s next destination. But with Quintette and Peace River Coal, Sullivan is not sure where that leaves Mount Hermann. “At some point in the next 30 years, that resource will likely be developed. We now have a much better handle on than we did five years ago when we really started looking at it. We spent, I don’t know, $8 million looking at that permit and doing work on it.

We understand the resource pretty well. The interesting part is now that we own Quintette, and (hopefully) PRC, Hermann is right in the middle of that checkerboard. We might be able to do things differently now, having all of those pieces, so that’s what we’re looking at.”