• Coal is the world’s largest source of energy for the production of electricity.
• 1 billion tons of coal used in global industrial steel production each year.
• There are zero alternatives to coal in the industrial steel-making process.

Anthracite Coal

What Is It and Why This Is So Important?

Anthracite is officially classified as coal however it is not just another fuel, anthracite should not be confused with just ordinary bituminous coal. Anthracite is the highest quality metallurgical coal available, clean burning, hard coal with the highest carbon content of any coal, very energy efficient and even burns smoke free. This premium coal represents only 1% of world coal reserves.

The Cleanest Burning Solid Fossil Fuel

Anthracite is an almost pure form of carbon. It has a very high heat value, and very low levels of sulphur and other impurities. This makes it not only the most sought after home heating fuel but also a much sought after, high quality component for a number of industries. The anthracite coal extracted from the AIM coal concessions in Peru have been tested by the world-wide highly regarded SGS labs and the findings indicate a very high fixed carbon, very low ash and sulpher content with a high calorific value. AIM would be pleased to provide the analysis upon request.

Why Does the World Need Anthracite Coal?

As a result of its attributes, anthracite coal trades at prices substantially higher than thermal coal and has a lower environmental impact. High quality anthracite is increasingly sought for by the steel industry, always under pressure to reduce costs and improve margins. Metallurgical coal together with iron ore is the principal raw materials used to make steel. As such, it supports an improved quality of life for all of us through its use in the construction of homes and hospitals, and in the production of everything from mass transportation vehicles to wind turbines. Due to its high carbon content and low volatiles, anthracite is more reactive and efficient with respect to energy released than the lower–ranked coals and consequently has a lower environmental impact due to the lower greenhouse gas emissions.

The industry most commonly associated with anthracite is the steel industry.

Within the steelmaking industry, anthracite is used in three processes

1. Pulverized coal injection
2. Basic Oxygen Steel
3. Electric Arc Furnaces

Present Activities

• Assets encompass 1,000 hectares of mining concession property consisting of three sites of 600, 200 and 200 hectares respectively.
• Percana SA initially acquired these properties based on indications of the presence of high grade anthracite coal. Illegal artisan miners are currently operating multiple one-entry mines on the property, which further indicates the presence and mine-ability of these deposits.
• To verify the geology and quality of the coal, Percana SA commissioned local geologists to compile a technical report on the 1,000 hectares. Although the report yielded optimistic estimates of resources, reserves and economics, it does not meet public reporting standards.

LOCATION

• located in Huaranchal, which is one of ten districts in the province of Otuzco.
• Two-hour drive from Trujillo (the second largest city in Peru), and an equal distance to the city of Otuzco.
• Also strategically located 200km from Salaverry, which features a port that can service ships with capacities of up to 35,000 tons. The Port of Salaverry provides direct access to the Pacific Ocean.

INFRASTRUCTURE

Water A river adjacent to the property provides access to water for mining operations. However, most of the coal on the property may be extracted with minimal or no coal washing. Power Power lines cut through the property, although Aim is yet to ascertain the capacity of these lines. The company expects to use diesel powered equipment for most of its mining activities. Roads The first half of the road from the property to Otuzco is along steep mountainsides and can support 25-ton trucks. The next half of the road to Otuzco is better maintained and can also support 25-ton trucks. The road from Otuzco to the Port of Salaverry is well constructed, paved, and has bridges that can support up to 50-ton loads. This will facilitate smooth hauling of coal to the port.   Besides accessibility to water, transportation and electricity, there are also small villages on the property with ample accommodations and restaurants to service exploration crews and other travelers.

Market Potential

• Highly desirable resource with a variety of uses. I
• Primarily used in the manufacturing of steel, the production of cement, and the generation of electricity.
• 70% of the steel produced globally relies on coal (World Coal Association, 2013); 200kg of coal is required to produce one ton of cement (Van Oss, 2012); and 41% of global electricity production relies on coal (Clemente, 2012).
• Highest ranking coal because it is older and harder, contains more carbon, has lower moisture content, and burns hotter than any other type of coal. Comprising only 1% of global reserves, anthracite is also the cleanest burning fossil fuel on the planet (Cornerstone, 2013).

Once the joint venture with Prina Energy Aim intends to sell its output to international customers through the joint venture corporation concentrating the marketing efforts in India.

• Unavailability of Anthracite Coal in India creates a huge potential for coal as a fuel for Indian Steel industry, which is growing on progressive and steady pace.
• Huge scope for growth is offered by India’s comparatively low per capita steel consumption and the expected rise in consumption due to increased infrastructure construction and the thriving automobile and railways sectors.

Competitive Advantage

Aim has a variety of advantages. The company has a team of technical experts on ground in Peru, and has also recruited advisors and directors who bring complementary skills to the venture. In terms of infrastructure, power lines run through Aim’s property, while a river runs adjacent to the site. The road network from the site to Otuzco can support 25-ton trucks. From Otuzco to Salaverry, the road is paved and well maintained, and can support up to 50-ton trucks. There are also accommodation facilities close to the property that can cater to Aim employees and contractors. Other advantages include competitive labour wages in Peru, and competitive storage and stevedoring costs at the port together with the ability to extract deposits with minimal or no coal washing.