PERTH (miningweekly.com) – A feasibility study into ASX-listed Stanmore Coal’s The Range project, in Queensland, has confirmed the technical and economic viability of the project.

The feasibility study predicted that the project could deliver some five-million tons a year of high energy, export quality thermal coal, over a life-of-mine of 25 years.

The project currently contains a Joint Ore Reserves Committee-compliant reserve of 94-million tons, and a total resource of 287-million tons, of which 18-million tons were within the measured category and a further 187-million tons in the indicated category.

The mine would use conventional truck and shovel methods to deliver the run-of-mine coal to a coal handing and preparation plant at the mine.

Under an owner-mining module, the project would have a capital cost of some A$599-million, while a contract mining model delivered a capital cost estimate of A$455-million.

The project had an estimated net present value of between A$441-million and A$499-million, and an internal rate of return of between 18.6% and 19.1%, depending on the development option chosen.

“The feasibility study for the Range project confirms economics which support the development of a cost competitive, low strip ratio, export grade thermal coal project in the Surat basin,” said Stanmore MD Nick Jorss.

While the project economics were robust, Stanmore believed that there was scope to further reduce the cost of rail and port infrastructure, and the company was currently working with key infrastructure providers to deliver a final, low-cost infrastructure solution.

“The Range project economics are attractive and a delay to delivery of rail infrastructure allows the project to benefit from reducing contractor and capital costs. Stanmore continues to work with rail and port providers to deliver export infrastructure to support the Surat basin as cheaply and quickly as possible,” said Jorss.

He noted that although the quality benefits and environmental performance of the Surat basin coals would continue to be attractive to customers in Asia, companies had to deliver the product to export markets as cheaply as possible in order to remain globally competitive.