PERTH (miningweekly.com) – An updated scoping study into the Lochinvar coking coal project, on the border of Scotland and England, has not only lowered capital cost estimations, but nearly doubled the project’s projected net present value.

Compared with a 2014 scoping study, the scoping study estimated that construction capital declined from $284-million to $229-million, net present value increased from $263-million to $410-million, and the internal rate of return increased from 20% to 27%.

The updated scoping study is still based on the production of 47-million tonnes run-of-mine coal and 34-million tonnes of saleable coal, over a mine life of 26 years.

First production for the project has been pushed out from 2018 to 2022.

ASX-listed New Age Exploration said on Wednesday that, to achieve the outcomes indicated in the scoping study, funding of some $250-million would be required for the exploration and development, as well as project construction.

New Age noted that the completion of the updated scoping study marked the completion of the first major milestone in the restart of activities at the mine, after a decision was taken in 2015 to place activities on hold owing to the low coking coal prices at the time.

A new potential timeline of four years to production has now been assumed, and an additional year has been added to the 2014 scoping study development timeline, to include an allowance to seek funding for the development and exploration work.

New Age expected to restart a staged exploration programme in the second half of this year, which will initially be funded from available cash. The first stage of the exploration will focus on opportunities to extend the resource into the Lochinvar South licence, and to de-risk the project.

Further, New Age was advancing discussions with possible strategic partners, as the company believed that shareholder value could be maximised through the involvement of a partner to fund and advance the project.