Montem Resources (MR1) - Green Hydro Project Gets Alberta Support

Montem Resources Ltd. is an ASX-listed steelmaking coal and renewable energy development company focused on the advancement of its projects located in the Crowsnest Pass of Alberta Canada.

The government of Alberta in 2021, reinstated its 1976 Coal policy including the 4 coal categories. The legislation provides restrictions to coal leasing, exploration and development based on the categorisation of the operation. Montem Resources Ltd. at this time was advancing its Tent Mountain Coal project towards restart.

The large coal project of Hancock Resources in the proximity of the Tent Mountain project was denied its licensing at which point Montem Resources Ltd. decided to re-evaluate its project believing that the risk its investors would incur became too high.

The company in July 2022 published a pre-feasibility study of the Pumped Hydro Energy Storage system of its Tent Mountain Renewable Energy Complex as well as a business case analysis for the green hydrogen electrolyser element of the project. The studies form part of the initial investigations into the potential transition of the Tent Mountain Mine into a renewable energy complex.

The pre-feasibility study shows a project life of more than 80 years, with an installed capacity of 3290 MW and 2,560 MWh storage capacity which will allow for 8 hours of continuous generation. The pre-feasibility study further recommends optimisation work to be completed regarding the increase of the pumped hydro energy storage system. The increase in storage may offer double the energy storage for a low capital cost.

The company has also entered into a framework agreement with the Piikani Nation for the cooperation in the review of the development concept of the Tent Mountain Renewable Energy Complex.

Montem Resources Ltd. enjoys the support of the Government of Alberta, having received a written support declaration by the Premier of Alberta, the honourable Jason Kenney. 

Management

Montem Resources Ltd. is led by Peter Doyle, who serves as the managing director and Chief Executive Officer of the company. Doyle has more than 25 years of experience in coal mining and has been involved in various stages of a project ranging from exploration to production. He has also been involved in greenfield and brownfield coal mine developments as well as project management. He has previously held various senior management roles including the Vice President of Marketing and Business Development at Atrum Coal Ltd, Chief Operating Officer at Cockatoo Coal Ltd, Vice President of Coal at Wood Mackenzie and Project Manager at Glencore (Xstrata Coal).

Robert Bell serves as the Chief Commercial Officer of the company and has more than 30 years of experience in the Canadian mining industry. Bell has vast amounts of experience in executive management, marketing, operations and logistics. He has also been involved in various finance and treasury roles as well as business development, technical marketing and mergers and acquisitions.

Melanie Leydin is the Chief Financial Officer (CFO) and company secretary of Montem Resources Ltd. Leydin holds a Bachelor’s degree in Business, majoring in Accounting and Corporate Law. She has more than 25 years of experience in the accounting profession and over 15 years of experience in holding various board positions in ASX-listed companies. She is a member of the Institute of Chartered Accountants, a Fellow of the Governance Institute of Australia and a Registered Company Auditor.

The senior management team of the company created a steering committee for its Tent Mountain Renewable Energy Complex (TM-REX), with Peter Doyle explaining the decision as follows:

“…we've gone and employed some really skilled people to assist, we have granted a Steering Committee and the chairman of that Steering Committee Will Bridge is the previous head of the Alberta Electricity System Operator so the head of electricity here in Alberta. Will has with him on the Steering Committee, a series of experts in their fields, whether it be the engineering side of things or in a connection or environment, to enable us to have the requisite skills to push this through.”

The Chair of the steering committee for the TM-REX, Will Bridge, is an experienced power industry executive and corporate director with more than 25 years of experience in the power generation industry. Bridge previously served as the Chair of the Alberta Electric System Operator (AESO) and has also held various positions at organisations including the Canadian Electricity Association, the Alberta Chamber of Resources, the Association of Power Producers of Ontario and TransAlta Corp.

Peter Doyle and Robert Bel also form part of the steering committee, with Andrew Keeping being the final member. Keeping holds a PhD in Molecular Biology from the University of Toronto and has previously held positions at ATCO Power, Boston Consulting Group and also served as the Managing Director of Boost Energy Ventures Inc. an electricity industry advisory firm.

The management team is responsible for the development and advancement of the TM-REX project.

Alberta Coal policy

The government of Alberta in 2021, reinstated its 1976 Coal policy including the categorisation of coal operations into 4 categories. The coal categories aim to dictate where and how coal leasing, exploration and development can occur. The policy further provided specific direction to the Alberta Energy Regulator. The direction includes a ban on any mountain top removal as well as the prohibition of all future coal exploration approvals on category 2 lands. The legislation further provides restrictions to coal leasing, exploration and development based on the categorisation of the operation.

Montem Resources Ltd. at the time of the policy announcement was advancing its Tent Mountain Coal project towards mine restart. The large coal project of Hancock Resources in the proximity of the Tent Mountain project was denied its licensing at which point Montem Resources Ltd. decided to re-evaluate its project believing that the risk its investors would incur became too high. Doyle explains the situation as follows:

“…it was a tough year last year. We had been working really hard and progressing quite well on our Coal assets. We had brought forward the Tent Mountain Mine to restart it, and the government shifted policy last year and we became uncertain as to whether or not we would be able to bring that mine into production or get it through the permitting process in both Alberta and federally.”

Tent Mountain Renewable Energy Complex (TM-REX)

Montem Resources Ltd. since 2019 has investigated the possibility of transitioning the Tent Mountain Mine into a renewable energy complex. The TM-REX is envisioned to consist of a 100 MW offsite wind farm, 100 MW Green Hydrogen Electrolyser and 320 MW Pumped Hydro Energy Storage system.

The TM-REX, which will be located approximately 16 km west of the township of Coleman, will be the site of the first large-scale production of green hydrogen in Canada should it be built. The Pumped Hydro Energy Storage (PHES) system of the TM-REX will assist in filling supply gaps in Alberta’s electrical grid, with solar and wind power being intermittent relying on the elements. The PHES has half the capital cost (CAPEX) requirement of a lithium-ion battery system and more than double the operating lifetime.

The TM-REX which may be operated as three separate power generation and storage units as well, is envisioned to be operated holistically. The wind turbines will generate renewable energy which will be used to power and recharge the PHES. The PHES in essence pumps water to an elevated position in times of abundant energy from where the water flows from the elevated position through turbines, generating power in times of energy scarcity. The TM-REX will implement the stored energy of the PHES to power the hydrogen electrolyser facility, from where Green Hydrogen will be produced, stored and transported globally for domestic and industrial use.

TM-REX Pumped Hydro Energy Storage System PFS

Montem Resources Ltd. published the findings of a pre-feasibility study of the Pumped Hydro Energy Storage System (PHES) of the TM-REX at the end of July 2022. The pre-feasibility study was conducted by Hatch Engineering. The highlights of the PFS include a project life of more than 80 years, with an initial capacity of 320 MW. The storage capacity of the PHES is 2,560 MWh with the possibility to nearly double the capacity through cost-effective means.

The PHES will have a generation duration of approximately 8 hours, with the potential to be increased to 15 hours through the increase of capacity. The capital cost of the TM-REX is estimated to be approximately CAD$ 750 million. The project’s economics has been evaluated for two projected energy price forecasts, namely base case and Net Zero Electricity. The economics according to the PFS indicate attractive returns for both cases, with the most robust returns generated from the Net Zero price forecast. 

Agreement with Piikani Nation

Montem Resources Ltd. also announced at the end of July 2022, that it had entered into a framework agreement with the Piikani Nation. The TM-REX falls within the traditional territory of the Piikani Nation. The signing of the agreement, witnessed by ministerial representatives of Alberta, has created a framework of cooperation in relation to the review of the PHES development. The parties have agreed to work together to implement a negotiation process as well as to jointly develop an engagement strategy with relevant stakeholders.

The agreement also includes the commitment by Montem Resources Ltd. to provide regular updates of the PHES to the Piikani Nation which will include the project’s potential impacts, benefits and economic opportunities. Montem Resources Ltd. will also reimburse certain costs to the Piikani Nation.

Future

Montem Resources Ltd. will conduct additional geotechnical work which includes the drilling of approximately 11 test holes required to provide site-specific geotechnical data for the major structure of the PHES in the near future. The company will upon completion of the geotechnical work initiate the front-end engineering design (FEED) of the PHES. The company will in the FEED phase of the project investigate the potential to increase the storage capacity of the PHES to 4,995 MWh, which will see the PHES be able to provide continuous generation for more than 15 hours.

The company will also pursue the incorporation of a partner for the TM-REX. Montem Resources Ltd. will instead of diluting its shareholders sell equity in the TM-REX itself as well as pursue various federal grants as a source of funding for the TM-REX. The company will also continue to develop its agreement with the Piikani Nation.

To find out more, go to the Montem Resources website‍