Name of the Project
Poplar Grove (Buck Creek No 2) coal project.

Location
The proposed Poplar Grove mine is located south of the proposed 3.8-million-tonne-a-year Cypress mine, in Illinois, US.

Client
Paringa Resources.

Project Description
When Paringa originally acquired the coal leases comprising the Buck Creek mining complex in 2013, the only historical work that had been conducted on the property was on Cypress (formerly the No 1 Mine) and, as a result, the mine was the company’s initial focus.

Paringa has since acquired additional coal leases, undertaken expanded drilling programmes and prepared a geological model for the entire Buck Creek mining complex.

This has led to the discovery of a section of coal to the south of the Cypress mine area, with a shallow depth from surface that could be suitable for a simple, low-cost boxcut mine development to access the coal seam.

The discovery has prompted Paringa to undertake technical studies on a shallow section of coal, now called Poplar Grove. Based on the exceptional results of these studies, Paringa will now develop the low capital expenditure (capex) Poplar Grove first, followed by the shovel-ready Cypress mine, as part of a staged development strategy for building a new midtier, high-margin Illinois basin coal company.

Using the Buck Creek mine complex’s coal resource estimate of 224.8-million tons of coal, the project can support production of 2.3-million tonnes a year of run-of-mine coal yielding an estimated 1.8-million tonnes a year of saleable clean coal at steady-state production over a 20-year mine life.

Proposed production from the mine will come exclusively from room-and-pillar mining methods.

The Buck Creek mine complex will ultimately become a strategic 5.6-million-tonne-a-year supplier of high-quality coal into the growing eastern US power market.

Jobs to be Created
Not stated.

Net Present Value/Internal Rate of Return
Not stated.

Value
Final capital expenditure for the Poplar Grove mine has been reduced to about $39-million, from the original $44-million, and significant reductions in the operating costs are also expected as the costs of labour, material, supplies and leased equipment continue to decline.

Duration
Construction at Poplar Grove is expected to get under way in early 2017, with production expected to begin in early 2018, before it reaches full production in 2019.

Latest Developments
Paringa has acquired the rights to the surface property necessary to construct its Poplar Grove coal mine, previously known as the Buck Creek No 2 mine.

The rights represent 129 ha controlled by local landowners, and complement the previously secured and permitted barge load-out facility and the Cypress (previously known as Buck Creek No 1) mine site.

Permitting for the Poplar Grove mine is progressing as planned, and Paringa remains on track for mine construction to start in early 2017, and for production to begin in early 2018.

“Over the coming months, Paringa is looking forward to updating the market on the Poplar Grove mine’s design, infrastructure, operating cost estimate, leasing and permitting,” Paringa CEO and president David Gay has said.

“General investor sentiment for US thermal coal continues to show signs of improving, providing an ideal environment to finalise financing discussions for the best undeveloped thermal coal project in the US.”

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 info@paringaresources.com.