Strong PFS for Balamara's Mariola

THE pre-feasibility study into Balamara Resources’ Mariola thermal coal project has forecast a net present value of $400 million and cumulative free cash flow of $1.13 billion from the capital outlay of $100 million, including a 25% contingency.

Anthony Barich

The PFS – a step towards realising its aim to become a substantial low-cost European coal producer – was based on the development of an underground longwall mining operation, with average production of 2.7 million tonnes per annum.

The PFS gives Australian Securities Exchange-listed Balamara sufficient confidence to move ahead with a definitive feasibility study on Mariola, paving the way for development of its first coal asset in Poland.

Mining and engineering consultancy Salva Resources, which did the PFS, will complete the DFS studies.

Balamara managing director Mike Ralston called the PFS a “tremendous result” for the Perth-based company’s shareholders which “clearly demonstrates the world-class nature of the Mariola asset and vindicates our decision to acquire 100% ownership of this project”.

“The Mariola PFS has exceeded our expectations in almost every respect, demonstrating exceptional returns from what is clearly a Tier-1 asset with the potential to underpin a very robust, long-life underground coal mining operation,” he said.

“This supports Balamara’s aggressive development strategy within the strong Polish coal sector. We are committed to transforming Balamara into a coal producer in the near term and Mariola represents the first phase of this initiative.

“We then have two other significant coal assets to follow.”

He said Mariola had the potential to generate substantial free cash over 15-year plus period, providing a strong foundation for the company’s ambitions.

Mariola is close to infrastructure and 14 power stations within a 125km radius, all in southern Poland’s Upper Silesian Coal Basin.

A west-to-east railway runs through the north of the concession area through Bukowno, which is a rail hub with rail connections to Olkusz, Kielce, Jaworzno and Katowice.