New lease of life for Isaac Plains project
Stanmore Coal has added another eight to 10 years of productive life to the Isaac Plains project it bought for $1.
The company said it bought leases adjacent to Isaac Plains from Peabody's Millenium Coal for $30 million.
Subject to approvals the new tenements will provide Stanmore with the right to develop an open cut mining operation that has the potential for about 15 to 20 million tonnes of coal "thereby significantly extending the life of the Isaac Plains complex''.
"This coal will be part of Stanmore Coal's new Isaac Plains South Project which is to be developed south of the existing Isaac Plains complex,'' Stanmore told the ASX.
"The new tenements will be amalgamated with Stanmore's existing exploration permit which the company said held significant potential for coal resources.
The newly acquired deposit will support a mine life of eight to 10 years and has the capability to produce semi- hard coking coal, a mid-vol PCI product, as well as a range of semi-soft/weak coking coals.
The deal will include a production based royalty capped at about $10 million which would be paid quarterly if the premium hard coal price is more than $A170 a tonne.
The deposit has a coal resource of 22.8 million tonnes and is 10 kilometres south of the existing coal handling and process plant (CHPP) at Isaac Plains.
The deposit will support a mine life of 8-10 years and has the capability to produce semi- hard coking coal, a mid-vol PCI product, as well as a range of semi-soft/weak coking coals.
The acquisition is expected to be funded from cashflows and existing debt facilities of the company.
Stanmore managing director Dan Clifford said the deal represented the culmination of the work completed over the last three years to assemble a long-life resource base for the company.
He said the deal as well as the bankable feasibility study underway for the Isaac Plains underground meant the company had a clear pathway for the full utilization of the $350 million of infrastructure at Isaac Plains.