PERTH (miningweekly.com) – Coal developer Stanmore Coal has secured a further A$1.5-million exploration support from Japan’s Taiheiyo Kouhatsu that provides funding for resource drilling at the Belview coking coal project, in Queensland.

Stanmore MD Nick Jorss pointed out on Tuesday that this was the third such funding arrangement for Stanmore since 2012, and was in addition to the A$4.5-million Japan Oil, Gas and Metals National Corporation joint exploration agreement, currently under way at the Clifford project.

“The funds will be used to complete an important phase of exploration, which will drive our feasibility studies and further evaluations of this attractive coking coal asset. The project features strong coking coal quality characteristics and is located on existing rail infrastructure,” Jorss said.

He added that the funding would allow Stanmore to deliver on its strategy of continuing to progress Belview while preserving the company’s cash reserves for project development, as well as potential business opportunities, as they arose.

Under the combined rights of the current exploration support agreement, and the first exploration support agreement at Belview, Taiheiyo had the entitlement to purchase up to 200 000 t/y of production from Belview, over the first five years of operations.

Within this arrangement, the first 225 000 t of coal purchased would be priced at A$2/t discount to the Japanese settlement price, which prevailed at the time. Any discounted tonnage amount not taken up in the first three years of production, would be foregone.

In March this year, Stanmore launched a prefeasibility study on the Belview project, considering a 3.5-million-ton-a-year run-of-mine project, producing coal from a single underground longwall operation.

The start-up capital for the single longwall project had been estimated at some A$869-million, with a life-of-mine expectancy of 64 years.The addition of a second longwall unit would cost an additional A$529-million and would increase production to seven-million tons a year.

The study was currently based on a 95-million-ton Joint Ore Reserves Committee-compliant resource, with an exploration target of between 735-million and 1.1-billion tons.