The project contains an 80 million tonne resource and Aviva and is now working on a scoping study for mining and coal preparation operations at a range of production scenarios from 500,0000 tonnes per anum to 2Mtpa (for raw and unwashed coal production).
Chief executive officer Lindsay Reed told MiningNews.net the resource definition at the project still needed to be improved, with the majority of the resource sitting in the indicated category, and 23.5Mt in the measured category.
Aviva acquired the deposit in May this year for an annual option payment of $80,000 for four years to a private vendor. If the project moves into production Aviva must also pay a yet-to-be-disclosed royalty.
The coal is sub-bituminous, similar to Collie Coal, and is best suited to a domestic market. The deposit is quite sizeable according to Reed when it is considered in relation to a base load power station’s requirements of about 1.8 million tonnes per annum.
“For WA it is probably the next largest coal province outside of Collie and even for the Eastern States, 80Mt is a lot of coal that is available.”
He said the end user of the coal produced from the deposit would shape the definitive feasibility study.
“Once we have actually established the economics of the coal deposit, there would be discussions with potential partners on either iron making or base load power stations, and that would be an important precursor to a definitive feasibility study – attracting a partner in one or both aspects of using the coal.
“Certainly with a base load power station you want somebody to come and build a power station. With an iron maker it could be equity partner it could be an offtake partner – it is a little bit more flexible.”
WA state energy provider Western Power called for submissions from independent power producers for a proposed power station early in August. Reed said the project could come online to supply the project.
At the end of the last quarter Aviva had $1.15 million dollars in cash. Shares in the company were down 7% to 3.8c in midday trade.