Baralaba ramp-up on track

COCKATOO Coal is continuing its extensive exploration activities with the help of record production and sales from the Baralaba mine in the southeastern arm of Queensland’s Bowen Basin.
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The 3m thick intersection of the Dunstan Seam as part of Cockatoo's Dingo project exploration.

Blair Price

The company gained producer status after acquiring Peabody Energy’s 62.5% stake of the mine in December 2008, when the open cut operation’s output was about 294,000 tonnes per annum of thermal and pulverised coal injection coal.

For 2009 Baralaba achieved a record 521,594t run-of-mine coal production, an improvement of 77%, while total sales from the mine reached 455,506t with 69% consisting of thermal coal and the remainder PCI coal.

In late July Industrea subsidiary Huddy’s Mining Services won the 18-month mining contract for the mine and production increased notably in the second half of 2009.

December quarter production hit 156,145t, 85% higher year-on-year.

The output was also an 8% improvement from the previous quarter and 38% higher than the June quarter.

Cockatoo said the better production rates in the December quarter had been maintained with good mine fleet availability and utilisation, while operational techniques had been refined.

The 8% gain on the September quarter came from only a 5.7% increase in overburden stripping.

Cockatoo credited this improvement to localised and periodic coal extraction along with the start of in-pit dumping as pit operations moved toward the northern end of the open cut.

Despite the performance, Cockatoo has warned of periodic fluctuations in production and overburden strip ratios because the mine is a small operation.

Sales revenue from the mine reached $17.7 million for the December quarter, a 25% improvement from the previous three-month period, while cash costs were up 1% to $14.9 million.

Exploration

Cockatoo is drilling the Baralaba mine area with the ultimate aim of linking it to the Baralaba North project.

Integration of the Baralaba and Baralaba North geological models is in progress and will allow conceptual mine planning over 5km of strike length when complete.

Cockatoo is using four rigs at the Dingo project more than 10km northwest of the mine, while further Baralaba North drilling is planned this year.

Over at the Surat project in the Surat Basin, Cockatoo drilled 49 holes for 5.69km last quarter with coal intersections up to 17.1m and averaging 9.7m.

The company’s focus will be on the Tin Hut creek deposit in the project area, which has up to a 5km strike length, is 2km wide and open to the north and south.

Cockatoo’s five projects in the Surat Basin hold a total of 614 million tonnes of resources, including 84.3Mt measured in the Woori project and 35.5Mt measured in the Kingaroy project.

Cockatoo managing director Mark Lochtenberg recently joined the board of the Surat Basin Rail joint venture, which aims to link the basin to the Port of Gladstone.

Cockatoo is also part of an industry consortium that will upgrade the Moura to Gladstone line with Queensland Rail.

Meanwhile, the Wiggins Island Coal Export Terminal consortium is aiming to get financial close on the recently agreed framework to start developing the terminal for Gladstone’s port.

WICET is targeting 70Mt per annum of throughput capacity with first coal loading to start in 2013.

Cockatoo ended the December quarter with $35.46 million cash.

Shares in Cockatoo closed down 3.8% to 38.5c yesterday.

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