The proposed Colton mine lies in the Maryborough project of EPC 923, where the company is completing an environmental management plan and mining lease application by year-end.

Northern Energy will put together a tender process in a bid to win a JV partner for the Colton mine development, with the company aiming to establish an open cut operation to start up shipments in early 2010 from a nominal 200,000 tonnes per annum production.

In its update to the market, the company said it had already received “a number of expressions of interest from a range of investing parties including steel companies, coke producers and coal traders”

A short list of candidates has been invited to submit a binding offer, but Northern Energy also notes the global financial crisis has introduced substantial near-term uncertainty in the outlook for global growth.

“This uncertainty has also impacted the final stages of the Maryborough tender process, and as a result the process of interested parties finalising their binding bids has been delayed,” Northern Energy said.

Previous laboratory analysis of bore cores from the Colton site since 2006 has provided an indicative specification for the Burrum hard coking coal, according to the company.

“These specifications place the coal at the high end of the coking coal quality spectrum and Northern Energy believes that with such qualities it will represent a valuable part of a coke maker’s blend,” the company said.

Current project planning for Colton has Northern Energy looking at an initial mine life of five years, a product strip ratio of 14:1, initial capital expenditure of $A25 million ($US16.09 million) and a mining method of using excavators and trucks along with a wash plant.

Bundaberg is seen as the base case for export, otherwise the Gladstone Port will be considered, while the mine is anticipated to start in the last quarter of 2009.

Shares in Northern Energy closed at 71c yesterday.