The company also announced the purchase of a coal stockpile, blending and distribution facility centrally located between Eastern’s Straith and Cascade mines at Timaru.

 

Last year Eastern acquired the Cascade mine in the northwest of New Zealand’s South Island, and is currently exploring 5km north of Cascade at Whareatea West with the aim of proving up high quality coking coal for mine development.

 

Eastern said this week’s acquisition would build on the company’s New Zealand assets as well as “secure an operation in an area of New Zealand’s South Island where considerable market opportunities exist”

 

The Straith coal is predominantly sub-bituminous thermal coal. The operations are located in three separate areas within the Ohai/Nightcaps region, where opencut and underground coal mining operations have been conducted for more than 50 years.

 

Operations, initially by mining contractor, are scheduled to commence early October aiming for more than 100,000 tonnes per annum.

 

Confirmatory resource drilling conducted during the course of due diligence has confirmed an initial measured resource at Straith of 2.85Mt.

 

Eastern has also applied for prospecting permits over the region immediately adjoining “where there is potential to increase the estimated tonnage through further exploration,” the company said.

 

The purchase price of $NZ2 million (less than 7c per tonne) will be paid by Eastern from existing cash reserves.