According to its preliminary feasibility study, Vickery South could have an 18-year life and run-of-mine production of 2 million tonnes per annum of semi-soft coking coal for a cost of $206 million.
A 3Mtpa option is a conceptual case to demonstrate the potential of the project, but is dependent on the availability of additional coal above the project’s current JORC Code Inferred Resource estimate of 42Mt.
Coalworks retains a current target of 50-60Mt in its Vickery South tenement area, chief executive Andrew Firek said.
“We are very encouraged by the positive outcome of the PFS, which is a major milestone for us,” he said.
“The study shows high quality semi-soft coking coal forming 84% of coal product from an open pit coal mine.
“The PFS will now provide a sound basis to proceed to bankable feasibility study. Once a decision to mine is made on the basis of the BFS we would expect construction to commence in late 2011 or early 2012.”
Consultants Minarco-MineConsult’s PFS found the mine could produce an average of 1.41Mtpa coal with an average yield of 85% on washing.
The mining workforce would be 230, with product coal to be conveyed to a rail load-out between the mine site and rail line.
Coalwork’s shares were up by 1.5c to 48.5c in morning trade.