Name and Location
Mariola 1 thermal coal project, Poland.

Client
Balamara Resources.

Project Description
An updated prefeasibility study (PFS) on the Mariola 1 project, based on a proposed change in the optimal mining equipment and mining method identified for the project, envisages the development of an underground mining operation using bord-and-pillar mining, with average production of 2.6-million tonnes a year.

This method allows for shallower coal seams to be mined than previously anticipated, and for several coal seams to be mined simultaneously which was not possible under the longwall method. This has added 13-million tonnes (33%) to the project and increased the mine life from 15 to 20 years. Primary development of the mine will be achieved using continuous miners in the coal and roadheader in-fault driveage.

Net Present Value/Internal Rate of Return
The updated PFS estimates an after-tax net present value, at a 10.5% discount rate, of $410-million and a nominal internal rate of return of 92%.

Value
The capital development cost of the project is estimated at $64-million, including 15% contingency and sustaining capital over the life-of-mine.

Duration
Not stated.

Latest Developments
The results of the updated PFS has provided Balamara with the impetus to start preparatory works to undertake a definitive feasibility study (DFS) at Mariola 1.

The company regards the permitting of several holes required to start a final drilling programme at Mariola 1 as a necessary step before starting a DFS, although other parts of that study, which do not depend on this drilling, might begin earlier.

Balamara has started the PFS for the Mariola 2 concession, located 4 km from Mariola 1. The parameters of the commercial enterprise of Mariola 2 are expected to be comparable to Mariola 1.

The company’s intention is to ultimately merge the two Mariola concessions into one larger Mariola project DFS in the first half of 2016, with completion targeted for the third quarter of 2016, followed by a decision to mine thereafter.

Key Contracts and Suppliers
HDR Corporation (updated PFS).

On Budget and on Time?
Not stated.

Contact Details for Project Information
Balamara Resources, tel +61 8 6365 4519, fax +61 8 9388 6040 or email enquiries@balamara.com.au.
HDR Corporation, tel +61 7 3258 6000.