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Out of three possible product mixes, Bandanna’s preferred product from the project will boast an energy content of 6250 kilocalories per kilogram on an air-dried basis, with total moisture of 16% (as received).
This minimum standard product will also have an ash content of 13% and total sulfur of 0.9%, both on an air-dried basis.
“Unlike other projects in the Galilee Basin which have JORC resources, the resources identified in Bandanna’s South Galilee project consist only of the lower ash D1 and D2 seams,” the explorer said.
“With the exception of one ply, which is not planned to be mined, all of the coal has raw ash content of approximately 20 per cent or less, with some 390 million tonnes at less than 12 per cent.”
The resource of 1.2 billion tonnes is based purely on the higher quality seams in the project area, while the company noted there was still “significant further exploration upside”
Bandanna managing director Ray Shaw had no qualms about comparing South Galilee’s proposed product to what might come from rival coal plays in the Galilee Basin.
“Selection of a preferred product specification for the South Galilee project is a significant step as it forms the basis around which our project execution strategy is being designed,” he said.
“With a higher energy content than the coal from the Carmichael deposit recently purchased by Adani, and a higher product yield than Hancock Prospecting’s proposed operation at Kevin’s Corner, this product should easily find acceptance in the thermal coal market.”
The prefeasibility study for the project is on track for completion next month.
Bandanna envisions 15 million tonnes per annum of product coal from 2015 using a combination of one dragline in an open pit operation and two longwalls, based on preliminary indications from the study.
AMCI is set to earn up to half of the project from Bandanna by funding $25 million of exploration and development.
Bandanna is seeking possible deals for its portfolio of Queensland coal projects, including its large stake of the $1.5 billion South Galilee project.
Shares in the explorer closed up 4.1% to $1.885 on Friday.
