New Horizon lowers costing for Kinney
PERTH (miningweekly.com) – The capital expenditure (capex) required for junior New Horizon Coal to bring its Kinney project, in the US, to production, has decreased by some $40-million.
The ASX-listed New Horizon said on Wednesday that a comprehensive review of the capex proposed in the prefeasibility study (PFS) had suggested a phased development of the project, and had identified other cost-saving initiatives.
The review identified three areas of capex reduction, including deferred surface infrastructure and coal wash plant construction, deferring unit train rail loading facility construction, and evaluating mining equipment sourcing.
The PFS, which was released in November last year, assumed new and wholly owned equipment for the Kinney project, but New Horizon noted that, in an effort to reduce initial capex, mining equipment would be purchased from the used market, while build components would be reduced in scale in order to defer capital spending on the project.
The PFS also proposed developing the project as a single continuous miner section to a full build of four continuous miner sections within three years, at a capital cost of $117-million, to reach two-million tonne a year production.
Under the alternative scenario proposed by the review, Kinney would start with a single continuous miner section, using surplus equipment, allowing New Horizon to develop markets for the product with significantly less capex.
The phased scenario would allow the project to start production with minimal surface infrastructure and would defer the construction of a unit train loadout in favour of existing facilities located within 70 km of the mine.
Total capex required under the new scenario would be $23-million, and additional savings of up to $3-million could be realised by leasing key equipment during the start-up phase.
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