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.

MDL 444 was first granted on 1 February 2012. The term of MDL 444 has since been renewed, and the current term commenced on 1 February 2017 and ends on 31 January 2022. EPC 830 was first granted on 9 July 2003. The term of EPC 830 has since been renewed, and the current term commenced on 9 July 2016 and ended on 8 July 2019.  The Company has applied for an extension to the EPC830.

20190306 BCC Landscape - Isaac River - Aerial Image[1].jpg


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.

Seam Lease Mass Seam
thickness
Insitu
RD
Moisture
Mt (m) t.cu.m % (adb) RAW
Ash %
(adb)
FC %
(adb)
VM %
(adb)
TS %
(adb)
RAW CV
MJ/kg
(adb)
LHD Indicated MDL 444 4.2 4.4 1.40 1.5 16.8 62.0 19.6 0.33 6779
LHD Inferred MDL 444 1.1 4.7 1.45 1.5 17.6 61.2 19.7 0.31 6680
LHD Total MDL 444 5.3 1.44 1.5 17.0 61.9 19.6 0.33 6758

Table 1. Resource Estimate for the Leichhardt seam (Raw coal quality, air dried basis (“adb”))

 

Stage 1 Concept Study

Following the release of Isaac River’s maiden Resource estimate in November 2018, the Company engaged Xenith Consulting (“Xenith”) to conduct 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.    

The Concept Study was centered around the extractability of the Leichardt seam via open cut mining methods, followed by the potential of highwall mining.  The Study was based on utilising contract mining and accessing third party infrastructure. 

The key focus areas of the Study covered mine planning, operating cost, capital expenditure and product optionality.  The positive outcome of the Study encourages the Company to advance the Project into the next phase of project development and supports additional drilling to obtain fresh coal samples to test the coking properties of all the seams.  The site is drill ready and the planned drilling and exploration activities are likely to be followed by a revised resource estimate, and subsequently the undertaking of Stage 2 of the Study.   This will include modelling of the extraction of the lower seams, which are regionally known for their good coking properties, and the incremental impact on capital required.


Key assumptions and recommendations of the Study:

  • The Study included a review of the recent Resource Estimate of 5.3Mt (4.2Mt Indicated Resources, and 1.1Mt Inferred Resources1).  There is no change to the Resource Estimate, but it will be reviewed again following the next phase of drilling and exploration;

  • A margin ranking process based on a contractor truck-excavator mining method was used to identify the target area.  An open-cut pit shell was created based on a maximum 100m depth of cover for an average in situ strip ratio of 11.4bcm/t. A contractor highwall mining operation with 300m deep plunges towards the end of the open-cut life was also modelled.   The target areas corresponded largely to the part of the Isaac River Mineral Resource estimate in the Indicated Resource category.; 

  • Operating costs included contractor mining rates for overburden removal, coal mining and hauling, as well as toll treatment fees for the use of a regional wash plant and train loading facility;

  • Coal quality analysis suggested either a high yielding single product PCI coal, or an alternative configuration to produce a primary semi hard coking coal with secondary PCI / Thermal coal through washing the top and bottom part of the Leichhardt seam separately;

  • Capital costs estimate provided for minimal on-site infrastructure and service equipment, a haul road to a regional wash plant and train load out facility, land compensation, and feasibility study costs.

  • The Study recommend the taking of fresh coal samples to test the coking properties of all the seams, as some of the historical coal samples might have been affected by delays of up to 14 months before coal quality testing was conducted.

 

The Company was delighted with the Study outcome for Stage 1 of the Isaac River Coal Project, which demonstrated a positive business case for the first stage that in turn supported the Company’s maiden drilling program, to obtain more data in order to increase the confidence level and potentially optimise the business case in moving towards project development.

 
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.