Aspire Mining (ASX:AKM) has announced a Pre-Feasibility Study (PFS) for the Ovoot Coking Coal Project that has defied naysayers with positive parameters, delivering an internal rate of return of 43%.

Xstract Mining Consultants Pty Ltd confirmed that Ovoot is financially robust and technically and commercially feasible.

What drives the positive economics, in fact the keys to the project, are the LOM 82% average conversion rate of ROM tonnes to product together with a low LOM strip ratio of 7.6 bcm of waste per ROM tonne of coal including pre-strip.

The PFS assumes completion of the Multi-user rail line extending the Trans-Mongolian railway at Erdenet through to Moron by 2016. A separate Rail Pre-Feasibility Study for this line has been approved by the Mongolian Rail Authority.

The PFS was based on Probable Coal Reserves of 178 million tonnes, which ranks Ovoot as the third largest coking coal deposit in Mongolia, by reserves.

Significantly and as a pointer to the future, Aspire to date has only explored 20% of the Ovoot Basin.

The first stage project would involve production of 6 million tonnes per annum of saleable coal delivered by 191 kilometres over sealed road to the new railhead at Moron before being transported to end markets from 2016.

The staged development will de-risk the production ramp up and enable the first stage operational cashflows to underpin a future Rail Spur Line connection from Ovoot to link up with the Multi-user rail line at Moron. The Rail Spur Line from Ovoot to Moron will facilitate the targeted full scale 12 Mtpa coking coal operation.

In just over two years, Aspire Mining has defined a globally significant coal project capable of producing high quality coking coal to meet long term regional consumption requirements.

There is potential to partner with major off-take customers (steel producers) to assist with financing the Ovoot Project.

In the current risk averse macro market today’s PFS may not gain the traction that it might. There may also be a lack of knowledge of key aspects of the Ovoot project.

What adds potential spice to Aspire Mining and parts of the market may have missed is major shareholders Ivanhoe Mines / SouthGobi Resources sitting on the doorstop with 19.9% and Noble Group with 5%.