Paringa BFS proves life at Poplar Grove
PERTH (miningweekly.com) – A bankable feasibility study (BFS) into the Poplar Grove mine, in the US, has estimated a capital cost of $40-million to develop the 1.8-million-tonne-a-year operation, coal developer Paringa Resources reported on Monday.
On a standalone basis, the project is expected to have a net present value (NPV) of $172-million and an internal rate of return (IRR) of 35%.
The company stated that the BFS validated Paringa’s staged development strategy for its Buck Creek complex, in which it would build low capital and operating cost mines near river transportation.
The Buck Creek complex would ultimately produce over 5.7-million tonnes a year.
“Our plan is simple, we will develop low capital and capital cost mines located near river transportation in the Illinois coal basin. We will start with the low cost and high return 1.8-million-tonne-a-year Poplar Grove mine in 2017,” said Paringa CEO Todd Hannigan.
“Once Poplar Grove is established, we will then make low cost modular mine expansions to grow our production to 5.7-million tonnes a year and beyond. We will underpin this growth with long-term sales contracts to ensure that our investments are low risk, high return and generate strong levels of free cash flow.”
Once Poplar Grove is established, the company will make modular expansions to the mine’s capacity, followed by the development of the fully permitted 3.9-million-tonne-a-year Cypress mine.
The combined Buck Creek complex is expected to generate average earnings before interest, taxes, depreciation and amortisation of $132-million, if the two mines are operating at full capacity.
The combined development will have a NPV of $497-million and an IRR of 37%.
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