Atrum Coal Ltd (Atrum or the Company) (ASX: ATU) is pleased to provide resource and coal quality updates on its 100%-owned Elan Hard Coking Coal Project (Elan Project) in southern Alberta, Canada.

2019 Elan Project Drilling Campaign

Elan South

A total of 119 rotary air blast (RAB) exploration holes were completed at Elan South during 2019 for a total of 20,150 metres of drilling. The main focus of drilling was at South East Corner (65 RAB holes completed) and Fish Hook (39 holes completed), with an additional 15 holes completed at Oil Pad Ridge.

Large diameter coring was completed at three sites and PQ coring was undertaken at eight sites at South East Corner, with the coring undertaken at defined intervals at sites with known coal seam stratigraphy (existing RAB drillhole locations). Five LD cored holes were completed at Fish Hook, and at Oil Pad Ridge another three LD holes were undertaken. Analytical testing of the core samples taken from South East Corner, Fish Hook and Oil Pad Ridge is only partially complete, with interim results summarised in this announcement.

Isolation South

A total of 49 RAB exploration holes were completed at Isolation South for 7,850 metres of drilling. Eight holes were drilled in the southern area and 41 completed in the area north of the Oldman River on Cabin Ridge. The RAB holes at Isolation South complement 19 historical HQ size fully cored holes drilled in the 1970's.

Favourable weather conditions allowed Atrum to complete a program of three large diameter (150 mm) cored holes at Cabin Ridge over the past 3 weeks. The large diameter coring will enable Atrum to undertake coal quality, washability and carbonisation testwork on Isolation South in order to confirm and extend the already substantial historical test results from this area. Final coal quality testwork results for Isolation South are expected in the June 2020 quarter.

Elan HCC Project Resources

Elan South resource update

Based on the drilling results available at the end of 2019, an update to the Elan South resource has increased the total estimate by 46 Mt to 143 Mt (60 Mt Indicated and 83 Mt Inferred). This includes a 93% increase (to 60 Mt) in the Indicated classification of resources, as confidence levels are improved through definition of structure and acquisition of coal quality and washability data.

The previous Elan South resource estimate was 97 Mt (31 Mt Indicated and 66 Mt Inferred), as reported in Atrum ASX release dated 8 January 2019, Elan South Hard Coking Coal Resource Increased by 170% to 97 Mt.

Isolation South resource update

With the completion of 49 rotary air blast holes at Isolation South in 2019, drillhole spacing has been reduced to 100-200 m on the dip slope of Cabin Ridge, with positive to exceptional results in all drill holes completed, including a number of holes with apparent cumulative coal thickness exceeding 100m.

An interim update to the Isolation South resource in early December 2019 increased it by 97 Mt to 217 Mt (79 Mt Indicated and 138 Mt Inferred). Following incorporation of residual drilling results to the end of 2019, the Isolation South JORC resource has been further increased to 230 Mt (82 Mt Indicated and 148 Mt Inferred).

Total Elan Project resources

As a result of the additional resource definition at Elan South and Isolation South, overall Elan Project resources now total 454 Mt (142 Mt Indicated and 312 Mt Inferred).

Other areas within the Elan Project including Cat Mountain, Wildcat, Isolation, Isola and Savannah were not explored in 2019 and offer further exploration upside potential. In aggregate, the 2019 Elan Project exploration program delivered an increase in total resources of 156Mt.

The shallow and thick nature of coal deposition across much of the updated Elan Project resources offers strong potential for attractive project economics via low strip ratio mining.

Coal quality testwork results

Initial coal quality testwork results from the 2019 exploration program continue to support results from the 2018 program, and historical testwork, showing excellent potential for medium volatile, Tier 1 hard coking coal products.

Carbonisation testing results from South East Corner

Seam composite samples from the PQ coring program at South East Corner (Elan South) were tested individually at GWIL Birtley (Calgary) for physical, chemical rheological and petrographic analysis, before clean coal samples were transferred to CoalTech laboratory (USA) and DMT (Germany) for clean coal properties and coking characterisation testing include carbonisation testwork (by DMT).

The carbonisation testwork was undertaken on a blended composite, containing a blend of the main seam groups 1, 2 and 4 at South East Corner. Coke strength (CSR) values for the blended composite were 68.9 - 70.1 % and are within a similar range to Elan South results from the 2018 LDC program at Oil Pad Ridge (Elan South). All coal characterisation tests were conducted based on ASTM standards and results are presented on a dry basis.

Due to the significant amount of coal quality core samples collected during the 2019 program (including January 2020 drilling at Isolation South), coal quality and washability testwork remains ongoing and will be updated to the market once further results are received.

Preliminary Results from Isolation South Testing

While a significant amount of coal quality testing was undertaken during historical exploration programs at Isolation South, the clean coal testing program at that time was more limited. Atrum has just completed a program of three large diameter (150 mm) cored holes at the dip slope on Cabin Ridge. This large diameter coring will enable Atrum to undertake coal quality, washability and carbonisation testwork on Isolation South. Results from this testwork are expected to be received during the June 2020 quarter.

The sampling of RAB drill cuttings has allowed some preliminary coal quality testing to be undertaken on clean coal composites, prepared on cumulative floats (CF) at 1.45. The initial testing has delivered positive results, including low ash, high CSN and fluidity, with low phosphorus content. Petrographic analysis has also indicated mean maximum vitrinite reflectance values averaging 1.19% for Seams 2, 3 and 4 and 1.10% for Seam 1.

Scoping Study

The Elan Project Scoping Study on track for completion in March 2020 quarter. The study incorporates mining of both the Elan South and Isolation South areas.

Contact:

Max Wang

Tel: +1 403 973 3137

Email: mwang@atrumcoal.com

About Atrum Coal

Atrum Coal (ASX: ATU) is a metallurgical coal developer. The Company's flagship asset is the 100%-owned Elan Hard Coking Coal Project in southern Alberta, Canada. Elan hosts large-scale, shallow, thick, hard coking coal (HCC) deposits with a current resource estimate of 454 Mt (142 Mt Indicated and 312 Mt Inferred). Comprehensive quality testing of Elan South coal on samples from the 2018 and 2019 exploration programs, combined with review of substantial historical testwork data for the broader Elan Project, has confirmed Tier 1 HCC quality.

The Elan South area is located approximately 13 km from an existing rail line with significant excess capacity, providing direct rail access to export terminals in Vancouver and Prince Rupert. Elan South shares its southern boundary with Riversdale Resources' Grassy Mountain Project, which is in the final permitting stage for a 4.5 Mtpa (saleable) open-cut HCC operation. Around 30 km to the west, Teck Resources operates five mines (the Elk Valley complex) producing approximately 25 Mtpa of premium HCC for the seaborne market.

The Elan South area is located approximately 13 km from an existing rail line with significant excess capacity, providing direct rail access to export terminals in Vancouver and Prince Rupert. Elan South shares its southern boundary with Riversdale Resources' Grassy Mountain Project, which is in the final permitting stage for a 4.5 Mtpa (saleable) open-cut HCC operation. Around 30 km to the west, Teck Resources operates five mines (the Elk Valley complex) producing approximately 25 Mtpa of premium HCC for the seaborne market.

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