Name of the Project
Buck Creek mine complex project.

Location
The Buck Creek mine complex is located in the Western Kentucky region of the Illinois basin, which is one of the most prolific coal-producing regions in the US.

Client
Paringa Resources.

Project Description
The coal mining complex includes the staged, modular development of the 2.8-million-tonne-a-year Poplar Grove and 3.8-million-tonne-a-year Cypress mines.

An expanded bankable feasibility study (BFS) completed on Poplar Grove in March has incorporated a second coal seam to the mine – the Western Kentucky No 11 (WK 11) coal seam – resulting in a 56% increase in mine production to 2.8-million tonnes a year. The original BFS, which included the Western Kentucky No 9 coal seam, considered a 1.8-million-tonne-a-year operation.

Access to the WK 9 seam will be through a low-cost boxcut excavation followed by three decline drifts excavated using continuous mining equipment.

Paringa will access the WK 11 seam from the northern limb of Poplar Grove’s mine plan by 2020 through an incline, excavated using continuous mining equipment.

In 2033, Paringa will access the WK 11 seam from the southern limb of Poplar Grove’s mine plan.

Potential Job Creation
Not stated.

Net Present Value/Internal Rate of Return
The combined net present value (NPV) of both mines, at an 8% discount rate, has been estimated at $655-million. On a standalone basis, the NPV of the projected cash flows from the initial Poplar Grove mine has been estimated at $310-million at an 8% discount rate, with an internal rate of return of 42%.

Value
The expanded BFS has estimated total capital expenditure at $44.7-million for the initial construction of Poplar Grove. Capital for construction of the WK 11 incline and vertical shafts is estimated at $15.8-million, which will be funded from Poplar Grove’s operating cash flow.

Capital expenditure at the Cypress mine has been estimated at $101.8-million.

Duration
Construction of the Poplar Grove mine started in August 2017. First coal is expected 12 months from the start of construction.

Latest Developments
The installation of major coal processing infrastructure has started at the Poplar Grove project.

Construction remains on track to be completed in the third quarter, as the erection of structural support steel at the preparation plant continues and all major in-house coal processing infrastructure is now being delivered and installed.

Further, the company has completed the steel sheet piling to maintain support at the slope portal and has started the underground excavation of the slope decline to access the underground coal.

The mobilisation of shaft sinking equipment to build the mine air ventilation shaft is expected to begin in February and the installation of the barge load-out facility related infrastructure in March.

Paringa is also in the final stages of securing a lease finance package for all mine equipment with a major mine equipment provider.

Vertical construction of a preparation plant at Poplar Grove started in December 2017, with completion on track for the third quarter of 2018.

Key Contracts and Suppliers
None stated.

On Budget and on Time?
The project remains on track.

Contact Details for Project Information
Paringa Resources, MD and CEO Grant Quasha, tel +61 8 9322 6322 or email gquasha@paringaresources.com.