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Conceptual Longer Term Operations
The trench highwall mining operations at Duchess Paradise are expected to use only approximately
20 million tonne of the available resources of 511 million tonnes (281 million tonnes in the P1 seam, refer Table 4). In order to commercialise additional resources at Duchess Paradise underground mining methods must be employed. Two conventional mining concepts have been investigated: bord and pillar mining and longwall mining. These studies are conceptual in nature and have lower engineering confidence at this stage than the trench highwall mining examined in the PFS and include both Inferred Resources and coal in previously announced exploration targets in the conceptual mine plans.
In both methods all coal is derived from the P1 seam. Production is assumed to be washed and then trucked along a new private road to a conceptual new barge loading facility. The cost of the road is estimated at $170 million and a new barging facility is estimated to cost $36 million. Construction of a deep water loading facility and alternative transport options have not been considered at this time and will be subject to further study. The operating and parameters of these cases are presented in Table 3 below.
Summary of operating and financial parameters for conceptual underground mining cases
|
Underground Operations
|
|
Bord & Pillar |
Longwall |
|
ROM production
|
Mtpa |
2.0 |
4.4 |
|
Sales
|
|
1.6 |
3.2 |
|
Life of Mine Sales
|
Mt total |
33 |
65 |
|
Mine life
|
Yrs |
21 |
21 |
|
Yield
|
% |
81 |
72 |
|
|
|
|
|
|
Cash costs
|
A$/t FOBT |
63 |
48 |
|
Capex (1)
|
A$M |
167 |
579 | (1) Pre production capital- excludes new road and loading facility costs
The conceptual underground mining cases examined suggest that positive financial returns can be generated before taking into account the required new transport infrastructure. When transport infrastructure estimated at $206 million is included, the conceptual studies demonstrate that a scale of above approximately six million tonnes per year is required to generate economic returns.
Studies for larger operation
In terms of the larger underground operations the Company will extend the conceptual studies to include additional transport options and more detailed underground mining studies and investigate upgrading and extending the Duchess Paradise resource to support mining operations at this scale. This will form the basis for a definitive feasibility study on the underground operations, assuming a positive result from these studies.
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