Isaac River Coking Coal Project -
(MDL 444 and EPC 830)

The Project covers an area of 14 km2 and is located in the Bowen Basin in Central Queensland, approximately 30 km west of Moranbah and 130 km southwest of Mackay. The Project consists of Mineral Development Licence 444 (“MDL 444”) and Exploration Permit for Coal 830 (“EPC 830”). BMA’s (BHP Mitsubishi Alliance) Daunia Mine is located to the immediate west, and Peabody’s Moorvale West resource is located to the immediate north of the Project. EPC 830 occurs south of MDL 444 and abuts Peabody’s Olive Downs North Project (subject to a transaction with Pembroke Resources), and is approximately 3km North of Rio Tinto’s Winchester South project. The Project is well located relative to regional infrastructure with the Peak Downs Highway located 12km north and the Goonyella rail system within 3km of the Project. The key focus areas of the Study covered mine planning, operating cost, capital expenditure and product optionality. The positive outcome of the Study caused for the Company to immediately launch a maiden drilling program, as described below.

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Maiden Resource Statement

The maiden Mineral Resource estimate for the Leichhardt seam is 5.3Mt, which includes Indicated Resources of 4.2Mt (open cut) and Inferred Resources of 1.1Mt (underground). The Leichhardt seam has an average thickness of 4.7m across the Project and is sub- cropping within the boundary of MDL 444.

Stage 1 Concept Study

Following the release of Isaac River’s maiden Resource Estimate in November 2018, the Company engaged Xenith Consulting (“Xenith”) to prepare a Concept Study on the Leichhardt seam only, referred to as Stage 1.  Historic exploration confirmed that the Project hosts various coal seams which are currently being mined by abutting operations, however, coal quality data is only available for the Leichhardt seam.    

Single Product PCI Option
Mining cost (AUD per ROM tonne) $12.66/t
Mine Site cash cost (AUD per product tonne) $92.00/t
FOB cost (AUD/product tonne excl. royalties) $110.00/t
FOB cost (USSD/product tonne excl. royalties) $79.20/t
Base,Case Capital Expenditure (AUD) $15.70m
PCI Product price assumption range (USD/t) US$100 -US$135
Post Tax Real NPV8% (millions) $7m - $55m
IRR 19% -87%

Table 1.  Key outcomes of the Stage 1 Concept Study

Isaac River Drilling Announcement - April 2019 Map - with resource polys_e.jpg

Maiden Drilling Program

The Company has just completed its maiden drilling program at Isaac River, which was extended to include a sixth core hole at site PPD 005 following a 4.5m intersection of the Leichhardt seam, as well as what appears to be a thickening of the Vermont Upper seam to more than 5m thick. All core samples have now been dispatched to the lab and testing instructions finalised for coal quality analysis. The outcome of these tests are pivotal in the mine planning process, which in turn will be used to finalise the scope of the Project and to fast track it through the development and permitting processes towards a decision to mine. 

Xenith Consulting has already commenced with the updating of the geological model and will conduct a revision of the Mineral Resource estimate for the Project. The current Mineral Resource estimate of 5.3Mt, which only includes the Leichhardt seam, comprises Indicated Resources of 4.2Mt (open cut) and Inferred Resources of 1.1Mt (underground). See ASX release 1 November 2018.  Any revision to the Resource Statement and positive coal quality analysis will cause the Company to immediately update Mining Concept Study, which is expected to further enhance the economic viability of the project.