Name of the Project
Buck Creek coal 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 (capex) 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.

Capex 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
Paringa Resources has intercepted the Western Kentucky Number 9 coal seam with the Poplar Grove primary transportation slope, marking a material milestone towards the production of coal.

Intercepting the coal seam enables it to progress to the next phase of mining activities, including bottom development. This involves the linking of the slope with the intake and exhaust air shafts to establish the mine’s permanent ventilation system, as well as the construction of critical underground infrastructure.

Production of coal from bottom development will be used to commission the coal handling and preparation plant, which is ready to receive its first coal.

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.