In an update in the company’s annual financial report, Whitehaven said total expenditure for the first stage of the project was about $A135 million as at the end of June.

The company expects the total construction costs for stage one to be within 10% of the $186 million budget, but the final expense of the underground drifts will be determined by the ground conditions encountered.

Whitehaven submitted an application for NSW government approval of the second stage development on August 28.

While the initial first stage mine aims for 700,000 tonnes per annum of production using continuous miners, the second stage will have a longwall installed in early 2011 to lift output to 6 million tonnes per annum.

A longwall order is expected to be placed in October.

Last month Whitehaven agreed to sell a 7.5% stake of the Narrabri Joint Venture to a Korean consortium for $125 million, plus $11 million in costs and 7.5% of the future costs of the project.

The consortium comprises manufacturing, investment and trading conglomerate Daewoo International Corporation and government-owned Korea Resources Corporation (Kores).

Once all approvals have been given, the deal will leave Whitehaven with a 70% stake of Narrabri, while other joint venture partners Electric Power Development, EDF Trading and Upper Horn Investments will hold 7.5% each.

Whitehaven shares closed up 4c to $3.52 yesterday.