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Engineer Minserve completed an initial conceptual mining study for The Range which indicated a 5Mt per annum open pit conventional mining operation with an 18-year mine life, Stanmore managing director Nick Jorss said.
“The independent study considered both owner mining and contractor mining options, indicating that both are likely to be economically and technically viable,” he said.
“The Range project continues to pass each hurdle towards production in 2015. The project economics are robust and we have identified several areas for potential improvement to assess in future studies.”
The study has indicated a superior quality 10-12% ash thermal coal product suitable for export.
The Range project, 24km southeast of the Wandoan township, is located close to existing key infrastructure and the upcoming Surat Basin Rail line.
Minserve found The Range has sufficient room within the Permit for Coal to accommodate out-of-pit waste dumps, tailings dams and mine facilities.
The evaluation conducted as part of the study indicates a net present value of $A298 million for the owner mining case, with an assumed coal product sales price of $US95/t and nominal discount rate of 11.5%.
Stanmore said the capital cost estimate produced by the study indicated the development capital cost could be as low as $A299 million for the contractor mining case, through to $A502 million for the owner mining case.
The operating cost estimate produced by the study indicated that costs based on an owner/operator case, assuming $US95/t price for royalty calculation, were approximately $A85 per shipped tonne, Free on Board (FOB).
Subject to statutory approvals being attained, the outcomes of further studies, and the satisfactory progression of third party infrastructure, the site construction work would start in the second quarter of 2013, with first coal production targeted for the first quarter of 2015.
Jorss said Stanmore would investigate future development funding options, including introducing a minority equity partner into the project in advance of the major capital expenditure requirements which are expected in 2013.
