New owner TerraCom says fresh coal reserve estimates for the Blair Athol site in central Queensland should extend the life of mine from five years to seven.
Independent experts Xenith Consulting had conducted an extensive review on the Blair Athol project, reinstating and improving the total JORC Reserves to 13.5Mt and total JORC Resources to 44Mt, the company said.
Executive chairman Cameron McRae described the reserve upgrade as significant for the Blair Athol project, increasing the mine life by about two years at an expected production rate of about 2Mtpa.
“The resource upgrade to 44Mt provides the potential to increase the mine life further should some of this additional resource be able to be converted into reserve,” he said.
Re-opening the Blair Athol mine, mothballed in 2012 by current management, would not only mean 300 jobs for the local Clermont community, but also boost the Queensland Government Treasury, with more than $133 million in royalties alone over the seven-year projected mine life based on current prices, the company said.
TerraCom, through its wholly owned subsidiary Orion Mining, has reached agreement to acquire the mine from the Blair Athol Coal Joint Venture (BACJV) subject to certain conditions.
The acquisition price is $1 and TerraCom will receive $80 million from the vendor to meet Blair Athol coal mine’s rehabilitation liability as determined by Queensland’s Department of Environment Heritage Protection in November 2015.
The acquisition includes the mining lease, related licences, land, active contracts and all mining plant and equipment, including a dragline, to deliver TerraCom’s forecast production schedule and the progressive rehabilitation.
TerraCom has executed a five-year deal with Link Mining Services for a full service mining contract at the Blair Athol coal mine. A key element of the contract is the provision by Link Mining of $11.6 million to cover mining and beneficiation recommencement costs.
Terracom (formerly Guildford Coal) plans to restart operations before the end of the year.