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 Buck Creek coal mining complex includes the staged, modular development and cash flows from the Poplar Grove and Cypress mines.

An expanded bankable feasibility study (BFS) completed on the 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 be accessing 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.

Jobs to Be Created
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 the Poplar Grove mine.

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
Paringa will start initially with the simple, low-cost construction of the 2.8-million-tonne a year Poplar Grove mine in 2017. The construction period for the Poplar Grove mine has been estimated at about 12 months.

Paringa aims to deliver first coal production from the WK 9 seam during the second quarter of 2018. This seam will be mined throughout the project’s 25-year mine life.

By 2020, Paringa will access the WK 11 seam from the northern limb of Poplar Grove’s mine plan.

Latest Developments
Paringa has secured a five-year $20-million debt facility from Macquarie Bank to develop the Poplar Grove mine.

Key Contracts and Suppliers
None stated.

On Budget and on Time?
Not stated.

Contact Details for Project Information
Paringa Resources, tel +61 8 9322 6322, fax +61 8 9322 6558 or email admin@paringaresources.com.