New Age studies new coal project in the UK
PERTH (miningweekly.com) – A scoping study on junior New Age Exploration’s Lochinvar coking coal project, on the border of Scotland and England, has confirmed robust economics.
The project was expected to produce about 1.4-million tonnes a year of saleable coal over a 26-year mine life, at an operating cost of some $70/t and requiring a capital investment of $284-million.
The scoping study revealed that the project would have a net present value of $263-million after tax, and an internal rate of return of 20%.
“The study confirms the potential for a long-life operation producing a low ash, high volatile coking coal to supply domestic UK and European steel mills with operating costs in the lowest quartile of the global seaborne coking coal cost curve,” said New Age MD Gary Fietz.
“Lochinvar benefits from immediate access to existing rail and port infrastructure and locally available utilities required to develop the project. We are excited about developing a major new coal project in the UK, an excellent investment destination with low risk, an attractive fiscal regime and a rich coal mining history.”
The project currently has a total resource of 111-million tonnes, comprising 49-million tonnes of indicated resource and 62-million tonnes of inferred resource. The scoping study estimated that about 1.9-million tonnes a year of run-of-mine coal would be conveyed from the underground operation, and would then be processed and loaded onto rail.
Fietz said on Monday that the outcome of the scoping study had provided New Age with the confidence to continue with further exploration and development work.
The 2015 work programme would now look to minimise the technical and commercial risks of the operation, while environmental baseline studies and an environmental-impact assessment were also planned.
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