The Broughton project, an exploration permit south of Rio Tinto’s Hail Creek project in the Bowen Basin, is 90% owned by Eastern. Mitsui Coal Holdings has 10% with the right to increase to 20% for $11 million.
The focus of the current study is to establish a broad economic model based on a costed mine plan and look at strategies for processing and export. Several options are being explored including selling run of mine coal, or having the coal toll washed at nearby coal preparation facilities.
The joint venture partners may export the coal themselves or adopt a combination of these strategies, the company said. Resource estimates for the project, released in December, are 30 million tonnes of coal in two seams.
Eastern is also progressing coal seam methane exploration at its 60% held Galilee project near Longreach in central Queensland. Two CSM wells are being planned for later this year to confirm the results of earlier drilling programs and will involve gas desorption testing as well as permeability tests.
Mining operations continue at the Cascade operation in New Zealand with annual production of 100,000 tonnes planned. The company is also seeking approval to conduct drilling on the Whareatea West exploration permit it holds about 5km northwest of the existing Cascade mine.
A detailed geological model is being built based on earlier work with initial indications suggesting the permit contains hard coking coal. Eastern said the aim of the program was to prove up a 20Mt resource.
Eastern reported a net profit before tax of $A3.8 million for the half year ended December 2005 and said it was working on expanding the company’s asset base with a view to generating strong cash flows in the next two to three years.