PERTH (miningweekly.com) – Coal miner Bathurst Resources has exercised its first tranche investment into the Crown Mountain coking coal project, in Canada.

Bathurst in 2018 struck a C$121.5-million agreement with project owner Jameson Resources to acquire a 50% interest in the project.

The company will hold an initial 20% interest in the project by making a Tranche 1 subscription payment of C$7.4-million to Jameson’s Canadian subsidiary NWP Coal Canada, of which C$4.9-million has already been advanced in monthly installments in exchange for preference shares.

These preference shares will be converted into ordinary shares on a one-for-one basis with the completion of Trance 1.

The Tranche 1 payment follows on from an initial C$4-million, which was used to fund the summer exploration programme at Crown Mountain.

“The Crown Mountain project continues to be an essential part of our long-term strategy, providing a growth profile to our business in a jurisdiction other than New Zealand, that will complement the range of products we currently sell into the Asian market,” said Bathurst CEO Richard Tacon.

“Staging the investment with the option to exercise the tranches at Bathurst’s sole discretion had de-risked the project for Bathurst. Further investment will be dependent on the progress of the project, and it being fully funded up to production.”

The final tranche will consist of C$110-million to fund the mine construction and development.

The Crown Mountain project is expected to produce 1.7-million tonnes a year of coal over a mine life of 16 years. Free-on-board cash costs will average about $66/t during the first four years of operation, and will reach $75/t over the life-of-mine.

The project is expected to require a pre-production capital investment of $281-million.

Jameson said on Monday that with the financial backing and management assistance from Bathurst, the company was confidently moving Crown Mountain forward on all fronts.

“Being able to share the risks and fund the project with a partner that has a common philosophy, a proven track record, and a talented team providing technical support to the project has been a huge advantage,” said Jameson CEO Art Palm.

“We anticipate continuing to work hand-in-hand with Bathurst as Crown Mountain heads towards gaining its environmental approvals, mining permits, and ultimately construction and development of the mine.”