OPERATIONS

Tasmanian Oil Shale Project (BOE 100%)

Boss Resources Tasmanite oil shale project is located between Latrobe and Railton, 10 kilometres south-west of the port of Devonport in Northern Tasmania with excellent access to existing infrastructure (port and roads).

The Latrobe oil project has the potential to host 72 million tonnes of oil shale equating to 50 million barrels of oil. Approximately 6 million tonnes of the oil shale is less than 20 metres deep and amenable to open cut mining methods.

The Tasmanite oil shale horizon within EL 20/2004 has already produced 1.13 million litres of oil from historical underground mining operations. Historical drilling campaigns have demonstrated a continuity of the deposit over a large area.

Initial drilling program completed

In 2007 Boss completed an initial drilling program designed to improve tonnage estimates in the China Bush Plantation area, also known as China Flats, near the Great Bend of the Mersey River. Fourteen RC drill holes and two diamond drill holes were drilled for a total of 340m. Thirteen of the fourteen RC holes , and both diamond holes successfully intersected the Tasmanite oil shale at depths ranging from one to twenty three meters below surface.

As part of the exploration program, Boss plans to extract and test a bulk sample of approximately 20 to 50 tonnes in the nature of a scoping study to determine recovery rates of oil.

Exploration success - Feasibility study

Dependent on the success of its exploration the company will investigate the merits of a feasibility study to develop the Project towards mining of oil shale and extraction of oil.

The economic development of oil product from the oil shale requires two stages of mining and extraction. Firstly, the oil shale must be mined by conventional mining methods whether by open-cut or underground mining. Secondly, the oil needs to be extracted from the oil shale. Any shale oil extracted is likely to be able to be hydrotreated to yield a petroleum equivalent.

Processing test work

Processing test work on a 500kg ore sample shipped to the Fushun Mining Group oil shale refinery in China was positive returning a 9.5% crude oil content and very similar chemical and physical properties to Fushun's oil shale. Processing agreement discussions with Fushun are underway.

About Oil Shale

The term oil shale refers to sedimentary rocks that contain solid bituminous materials (called kerogen) that is released as petroleum-like liquids when the rock is heated.

When heated to high temperatures an oil-like substance and combustible gas can be extracted from the rock, which can be refined to produce clean petrol and diesel, electricity generation and be used as a raw material in the chemical and construction materials industries.

Total world resources of oil shale are conservatively estimated at 2.6 trillion barrels1. An oil shale demonstration plant in Queensland, Australia produced 700,000 barrels of oil between 2001 and 2003, and oil shale still remains a major energy source for Estonia (who account for 70% of world production) and the commodity is also being exploited in China, Brazil, Germany, Israel and Russia.

Australia's oil shale resource is estimated to be around 58 billion tonnes or 4,531 million tonnes of shale oil2 with significant deposits located in northern Queensland and Tasmania. This resource has the potential to significantly increase if research and development investigations into the processing of shale oil lead to the development of a commercial plant.

Tasmanite oil shale is unique to Tasmania and has advantages over other Australian oil shales in that it can be used as a source of bitumen as well as oil. The shale is also unique among world oil shales because its kerogen arises principally from its content of fossil oil spores.

Unlike other oil shales, oil from Tasmanite spores may be physically separated from the waste material. Tasmanite can therefore be beneficiated by relatively cheap physical processes such as froth flotation.

In 2007, prices for crude oil have risen again to levels that may make oil shale-based oil production commercially viable, and both major energy corporations such as Shell and governments worldwide are interested in pursuing the development of oil shale as an alternative to conventional oil.

Boss Resources point of difference - Tasmanite Oil Shale

This variety of oil shale is unique to Tasmania and has advantages over other Australian oil shales in that it can be used as a source of bitumen as well as oil.

The shale is also unique among world oil shales because its kerogen arises principally from its content of fossil oil spores. Unlike other oil shales, oil from Tasmanite spores may be physically separated from the waste material. Tasmanite can therefore be beneficiated by relatively cheap physical processes such as froth flotation.

For more detail on oil shale please click here (154kb, PDF)

1 American Association of Petroleum Geologists

2 U.S. Department of the Interior. U.S. Geological Survey.