A study by SMG Consultants, which was close to prefeasibility level, showed Minyango to be “sufficiently attractive to move to the next stage of evaluation”

Caledon said a number of production scenarios had been considered with the most efficient incorporating the two mini walls. Development drivage to support the mini walls’ advance would use the continuous miner/continuous haulage set-up currently used at the company’s neighbouring Cook mine.

An infill drilling program to give greater coal quality, resource definition and gas knowledge will be carried out. The drilling program is expected to be finalised this quarter and start shortly thereafter.

Caledon said Minyango was expected to yield 84% coal, 62% of which was coking coal and 38% thermal.

SMG identified the southeast corner of the Minyango property as the preferred location of mine access portal and surface infrastructure. The area lies on a cattle property owned by Caledon, easing mine approval processes and access.

At Caledon’s operating Cook mine, production was higher than in the March 2008 quarter as the Magatar system was fully operational.

The mine produced 175,000 run-of-mine tonnes for the quarter, with sales of 125,000t sold mainly on the spot market.

Caledon said it was still finalising contracts for the new Japanese financial year, but expected them to be in line with BHP’s hard coking coal settlements.

As previously announced, Caledon cut its workforce to 145 during the quarter.

It said it was still looking for buyers for the company and its assets.

Caledon closed down 2.9% to 67c.