The Australian Securities Exchange-listed Perth-based junior has begun a technical study on Buck Creek No. 2 mine to the south of Buck Creek No. 1 mine, on which results of a prefeasibility study are expected in the first quarter of next year.
Paringa is planning for a low capital expenditure development at No. 2 given the shallow coal seam depth at the planned mien portal and the potential to leverage off infrastructure at the permitted No. 1 mine.
The Buck Creek mining complex that holds both mines is one of the last remaining large-scale, contiguous, undeveloped coal deposits in the Illinois Basin not controlled by a major coal producer.
The complex is a well-defined block of coal with over a 1200 recorded coal seam drill intercepts. Extensive historical drilling data will form the basis of a coal resource estimate for the No.2 mine.
Paringa CEO David Gay said the PFS for the No. 1 mine was “advancing rapidly”
“It is going to be a very exciting 12 months ahead for Paringa,” he said.
Paringa believes the basin’s geology – specifically within its complex which is near some of the highest-margin thermal coal mines in the US owned by the second-largest US coal producer Alliance Resource Partners – lends itself to some of the most productive and lowest-cost coal mining in the country.
The initial target for both mines will be the lucrative Ohio River market via direct low-cost barge transportation consisting of large, scrubbed and highly efficient domestic power plants, which it can access as the complex is next to the Green River, which provides year-round linkage to the Ohio and Mississippi river systems which feed domestic coal-fired power plants and coastal export coal terminals in the Gulf of Mexico.
“Initial feedback from discussions with the Ohio River market confirms there is demand for new independent sources of coal in the Ohio River Market to increase the diversity of local supply,” the company said.
“The strong market fundamentals for Illinois Basin coal are underpinned by the substantial growth in US scrubbed coal-fired power plant capacity, with Illinois Basin demand forecast to increase by over 50% to 202 million tonnes from 2013 to 2020.”
