Donkin Project

Nova Scotia, Canada

Recent Activities

In Q2 2015, Kameron finished dewatering the two, 3.6 km long access tunnels to the Donkin Project’s target coal seam. Since that time Kameron has been actively working onsite to advance the Donkin Project toward production. The following is a list of project development highlights provided by Kameron;

  • Tunnel refurbishment is expected to be completed by the end of 2016
  • Production from the first continuous miner is expected to begin before the end of 2016
  • Construction of the coal handling, preparation and processing plant is anticipated to become operational in early-to-mid 2017
  • Production from a second continuous miner is scheduled for mid-2017
  • Two, dual coal sections are anticipated to be operational by the second-half of 2017
    • A typical coal section will consist of two continuous miners, six battery haulers, one feeder breaker, and two roof bolters
  • A total of 46 full-time employees/contractors are currently working onsite and Kameron is forecasting a total of 135 full-time workers onsite at full production
  • The 3.6 km long access tunnel conveyor belt has been installed
  • Kameron has cited the following as key project strengths at Donkin:
    • Coal quality – low ash, high energy thermal coal; high quality metallurgical coal (low ash, high vitrinite content, high fluidity, high crucible swell number (“CSN”);
    • Low mining costs – 8.1 raw tonnes per linear foot, 6.9 clean tonnes per linear foot;
    • Short truck haul to local power stations and deep water ports; and
    • Substantial Resource – 483 million tonnes; 30 year expected project life (2 continuous miner sections)
  • Kameron expects the washed coal quality of Donkin to be a high fluidity, high volatile metallurgical coal, with 3.5% ash, 1.5-2.0% sulphur, and 13,500+ BTU
  • Additional underground assessment drilling has been completed
  • A 69 kV electrical line from the town of Glace Bay to a newly constructed electrical sub-station at the Project is complete
  • Assembly of the initial mine fleet has commenced, including one continuous miner, two roof bolters, and three personnel carriers, with a second continuous miner commissioned in early 2016 and is expected to arrive in late 2016 prior to start of production
  • Construction of a new warehouse/washhouse/office was completed in the second quarter of 2016

On November 21, 2016, the Government of Canada announced a plan to phase out coal-fired power plants by 2030. The same day, the province of Nova Scotia announced an agreement-in-principle with the federal government. The agreement will allow Nova Scotia to continue to build on the progress the province has made in reducing Green House Gas emissions (“GHG”) while allowing for the province to continue to utilize coal in its energy mix beyond the 2030 closure deadline announced by the federal government.

Kameron representative Jim Bunn was quoted as saying “Minister McKenna’s announcement will not affect the commencement of production at the Donkin Mine, which is expected in December 2016. Kameron Collieries has always considered the closure of Lingan and Point Aconi power stations as a distinct possibility. There are ample opportunities to export the Donkin coal to both metallurgical and thermal customers, and this can be augmented by domestic thermal demand until these local plants are forced to close.”

Cline Acquisition

In April 2012, Project Manager Glencore (then Xstrata Coal) announced it was seeking an operating partner to assume its 75% interest in the Donkin Project. Glencore cited a change in its business strategy since first acquiring the Project, with a current focus on larger-volume mining complexes, as the reason for choosing to sell its interest.

On December 3, 2014, it was announced that Glencore had completed the sale of its 75% interest in Donkin to Kameron Collieries ULC (“Kameron”), a subsidiary of The Cline Group, LLC (“Cline”). The Cline Group’s US coal company, Foresight Energy LP, is one of the largest coal companies in the United States and well known for its underground mining expertise; currently operates three of the four most productive underground coal mines in the United States.

On December 12, 2014, Morien announced it had entered into an agreement with Kameron to exchange its 25% working interest in the Donkin for $5.5 million in cash and a production royalty on sales from Donkin (“Transaction”). Kameron also agreed to pay Morien a gross royalty of 2% on the first 500,000 tonnes of coal sales per calendar quarter and 4% on any tonnage thereafter from the Donkin Project. In addition, Morien closed a private placement in December, 2014, with Atlantic Royalty LLC, a subsidiary of The Cline Group LLC, for 3.45 million common shares in Morien at $0.30 per share, a 58% premium to market, for gross proceeds of $1,035,000.

In February 2015, Morien shareholders voted overwhelmingly (99.99%) in favour of the Transaction with Kameron. In March 2015, the Transaction closed and Morien’s 25% working interest was successfully transferred to Kameron. On closing, Morien received an initial cash payment from Kameron of $2 million. The remaining cash consideration of $3.5 million is to be paid in stages, with $2 million on the earlier of either first production from the Project and the 2nd anniversary of closing, and a further $1.5 million on the earlier of either first export sales from the Project and the 3rd anniversary of closing.


In July 2013, Morien received approval from the federal and provincial Ministers of Environment for the Donkin Coal Project (“Project”). The Project now has all of the necessary environmental approvals to advance toward full production.

To view the full Canadian federal Minister decision and related documents, please visit the Canadian Environmental Assessment Agency website here.

To view the full Nova Scotia provincial Minister decision and related terms and conditions, please visit the Nova Scotia Department of Environment website here.

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