PERTH (miningweekly.com) – A definitive feasibility study (DFS) into the Tenas coal project, in British Columbia, has found that the project could produce some 750 000 t/y of saleable coal.
ASX-listed Allegiance Coal on Monday reported that the DFS estimated a 22-year mine for the project, extracting just 15% of the entire resource of the grater Telkwa coal resource, with the Tenas project projected to deliver some A$121.3-million in annual revenues.
The project is expected to require a capital investment of $54.3-million, and would have a pay-back period of two-and-a-half years, with the pre-tax net present value estimated at A$407.3-million and the internal rate of return at 56.9%.
The project is expected to deliver earnings before interest, taxes, depreciation and amortization of A$63.7-million a year, with all-in free on-board costs estimated at $49.7/t.
“The Tenas project is truly unique. Our two prefeasibility studies completed in 2017 highlighted to us that this project has the potential to be a very low cost producer of a product highly sought after by the steel mills,” said Allegiance nonexecutive chairperson David Fawcett.
Allegiance will now work with its joint venture partner Itochu Corporation to secure permits to mine over the next 18 months, with the aim of bringing the Tenas project into production.
Japan’s Itochu in November of last year agreed to invest C$6.6-million for a 20% interest in subsidiary Telkwa Coal, which Allegiance said would be sufficient to fund the subsidiary through to the completion of permitting.
Once the permits to mine are granted, Itochu could subscribe for additional shares in Telkwa Coal.
Meanwhile, mine developing funding options will also be explored during the permitting phase of the Tenas project.