Name and Location
Buck Creek No 2 coal project, Illinois, US.

Client
Paringa Resources.

Project Description
When Paringa originally acquired the coal leases comprising the Buck Creek mining complex in 2013, the only historical work that had been conducted on the property was on the No 1 Mine and, as a result, the Mine was the company’s initial focus.

Paringa has since acquired additional coal leases, undertaken expanded drilling programmes, and prepared a geological model for the entire Buck Creek mining complex, which has led to the discovery of a section of coal to the south of the No 1 Mine area, with a shallow depth from surface that could be suitable for a simple, low-cost boxcut mine development to access the coal seam.

The discovery has prompted Paringa to undertake technical studies on a shallow section of coal, now called the No 2 Mine. Based on the exceptional results of these studies, Paringa will now develop the low capital expenditure (capex) No 2 Mine first, followed by the shovel-ready No 1 Mine, as part of a staged development strategy for building a new midtier, high-margin Illinois basin coal company.

Using the Buck Creek mine complex’s coal resource estimate of 224.8-million tons of coal, the project can support production of 2.3-million-tonnes-a-year of run-of-mine coal yielding an estimated 1.8-million tonnes a year of saleable clean coal at steady-state production over a 20-year mine life.

Proposed production from the mine will come exclusively from room-and-pillar mining methods.

The Buck Creek mine complex will ultimately become a strategic 5.6-million-tonne-a-year supplier of high-quality coal into the growing eastern US power market.

Net Present Value/Internal Rate of Return
Not stated.

Value
The project has an initial cost of $44.4-million.

Duration
Construction of Buck Creek No 2 is expected to take 12 months. Paringa hopes to start construction by the second quarter of 2017, with production targeted for mid-2018.

Latest Developments
Paringa has launched a bankable feasibility study (BFS) at the Buck Creek No 2 mine, following a positive scoping study.

“We are looking forward to rapidly progressing the BFS with the aim of starting construction during mid-2017. Moving directly to a BFS has been made possible by the comprehensive nature of the recent scoping study and the ability to leverage the extensive work completed as part of the No 1 mine,” Paringa CEO David Gay has said.

A scoping study on the No 2 mine has found that for capital expenditure of $44-million, Paringa could deliver a 1.8-million-tonne-a-year operation with a mine life of 20 years.

“Typically, a coal project in the US at this stage would move directly into construction; however, we will complete the BFS to identify key areas for optimisation,” Gay has noted.

Meanwhile, formal financing discussions were continuing with debt financiers to fund the No 2 mine.

Key Contracts and Suppliers
None stated.

On Budget and on Time?
Not stated.

Contact Details for Project Information
Paringa Resources, tel +61 8 9322 6322, fax +61 8 9322 6558 or email info@paringaresources.com.