Rey will sublease a site at Derby Port from Teck Resources and Xstrata subsidiary Lennard Shelf until 2012, with an option to extend.

The site has existing infrastructure and requires “modest” capital investment for Rey to export 2 million tonnes per annum.

Shipping operations at the site are restricted to daily high tides and will be achieved using barges loading into larger vessels in the King Sound.

Due to the tide constraints, Rey said it would continue to investigate alternative export sites in the area, but these options would require substantial infrastructure investment.

The port is 180km from Rey’s Duchess Paradise site, which contains 511Mt of thermal coal resources. Coal will be trucked from the site.

A prefeasibility study of the project will be completed late this year, with a definitive feasibility study and engineering design due at the start of 2010. Rey expects project start-up in 2012.

The company is also preparing for further exploration on its leases, targeting an additional 1-2 billion tonnes of coal to support a conceptual operation of up to 20Mtpa.

In takeover news, Rey has advised its shareholders to reject Gujarat NRE’s offer of A9c per share. Gujarat’s offer has been extended to October 30.

The company has also advised shareholders to take no action on a proposed counter offer from Crosby Capital of 19.5c per share. Crosby announced its intention to make a conditional cash offer for Rey on September 4 but is yet to submit a bidder’s statement.

Rey was trading unchanged this morning at 22c.