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Morien Resources Provides Update on Development Activities at Donkin Coal Project in Cape Breton, Nova Scotia

Morien Resources Corp. ("Morien" or the "Company"), is pleased to provide an update on development activities at the Donkin Coal Project ("Donkin" or the "Project") in Cape Breton, Nova Scotia, where owner/operator Kameron Collieries ULC ("Kameron"), a subsidiary of The Cline Group LLC, has been actively advancing the Project toward production. Morien has a gross production royalty on all coal sales from the Project.

Donkin Coal Project Development Highlights

  • Initial mining is anticipated to commence in the second half of 2016 with coal sales to follow the construction of a coal handling, preparation and processing plant ("wash plant")
  • Design of the wash plant and earthworks for this plant area are underway
  • Bulk sampling of target coal seam for testing by local power utility Nova Scotia Power Inc. anticipated in the next 60 days
  • Additional underground assessment drilling has been completed
  • Tunnel refurbishment is nearing completion
  • A 69 kV electrical line from the town of Glace Bay to a newly constructed electrical sub-station at the Project has been completed
  • Assembly of the initial mine fleet has commenced - this includes one continuous miner, two roof bolters, and three personnel carriers on site, with a second continuous miner expected by mid 2016
  • Mining plan calls for a room and pillar operation which includes the use of four continuous miners
  • The installation of conveyor infrastructure in the main access tunnel is underway with full installation of the conveyor system anticipated in the first half of 2016
  • A new warehouse/washhouse/office is under construction with scheduled completion in Q1 2016
  • Key members of operational team have been hired, 36 employees/contractors are now on site, and recruitment for operating phase is continuing

Donkin Royalty Summary

Kameron increased its ownership in Donkin to 100% through the purchase of Morien's 25% interest in February 2015 for a production royalty and cash consideration. Under the terms of the transaction, Morien owns a gross production royalty of 2% on the first 500,000 tonnes of coal sales per calendar quarter (excluding the initial 10,000 tonnes of coal sales from the Project) and 4% on any coal sales from quarterly tonnage above 500,000 tonnes ("Royalty"). In addition to the Royalty, Morien is entitled to receive aggregate cash consideration of $5.5 million, of which $2 million was paid on the closing of the transaction. Morien is entitled to receive $2 million on the earlier of first commercial sale of coal from Donkin and the second anniversary of the closing of the transaction (February 27, 2017), and $1.5 million on the earlier of first commercial sale of export coal from Donkin and the third anniversary of the closing of the transaction (February 27, 2018). Donkin is fully permitted, including approval for construction of an on-site barge-loading facility to access deep tidewater. The Donkin Royalty is payable to Morien over the anticipated 25 plus year mine life.

Qualified Person

Michael MacDonald, P.Geo. (Nova Scotia), Vice President Technical and Government Affairs, is a Qualified Person as that term is defined in National Instrument 43-101 and has reviewed and approved the scientific and technical information contained in this news release.


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