Local environmentalists will not be pleased, but Compliance Energy Corp. (TSX-V:CEC) has announced a positive pre-feasibility study for its Raven coal project on Vancouver Island.
The Vancouver-based company said Thursday the underground mine would cost approximately $272.1 million and construction could begin in 2012, subject to receipt of all necessary permits.
The project, which would produce both thermal and metallurgical coal, has raised the ire of environmental groups in the area who are concerned it could harm the local shellfish industry.
A group called the CoalWatch Comox Valley Society has come together to fight the project and question potential environmental hazards it poses to the region.
Compliance’s pre-feasibility study envisions a 16-year mine that would transport coal to Asian markets via Port Alberni.
The company also said Raven would be an underground mine with a “room-and-pillar” mining strategy to provide flexibility for the project.
The study estimated Raven’s pre-tax net present value at $201.9 million with an average realized coal price of $142 per tonne.
Compliance president and CEO John Tapics said he was pleased with the study, but added the company would try improve its costs.
At press time, Compliance shares were valued at $0.29.