Coalworks advances Vickery South

The tenement lies in the Gunnedah Basin, surrounded by several large operations, with Idemitsu’s Boggabri and Whitehaven’s Tarrawonga close by to the west and Aston’s Maules Creek mine to the north.

Speaking at the AJM Gunnedah Coal Conference, Vickery South operations manager Geoff Kidd said Coalworks has a range of coal projects in development around NSW, but Vickery South is the most advanced. He said the company views the project as an excellent entry point to the industry.

“This size operation we think is ideal for juniors to get their first mine away,” he said. Itochu will assist with approximately $11m for 49% of the project, by completion of the bankable feasibility study. Coalworks estimates the Vickery South mine will have an 18 year life, with a capital cost of $206m.

Coalworks floated in 2008. It won theVickery South exploration license through the NSW Government’s competitive tendering process in 2009. By mid-2010 it had purchased just under 700 acres of land, buying the Kurrumbede property for $14m. Coalworks said grazing operations will continue alongside mining.

An Environmental Assessment has been lodged, the pre-feasibility study was completed in late 2010 and now the bankable feasibility is underway and due for completion by March 2012. Kidd said developments were currently ahead of schedule and under budget.

Coalworks completed its drilling in March this year and Vickery South will participate in the July/March round of Port Waratah’s port capacity allocations.

Vickery South will be a truck and shovel operation. Coalworks expects an 85% yield, with 84% semi soft coking coal and 14% coking coal with qualities of 7.7% ash in the semi soft and 5.9% ash in the thermal coal.

Kidd said that the Kurrumbede property was far removed from the contentious alluvial farming land on the Liverpool plains, where BHP and Shenhua are planning their operations. The topography at the Vickery South site would prevent impacts to groundwater from the mine itself, he said.

“We believe the volcanics are an important barrier to the Namoi River, from a water management point of view. We are now going through a major hydrological program to prove that.”

Kidd explained that the study would also address Coalworks’ plans to construct a spur line and rail loop to connect to the Liverpool Ranges line. The rail line will inevitably cross surrounding farmland, raising the contentious issue of groundwater. The surrounding countryside drains to the Namoi River. Kidd said the any rail line plans “will be drawn in accordance with the study.”

Kidd was confident that Coalworks would remain on track to deliver first coal by 2014. “Our plans for Vickery South are aggressive but achievable. We have met all out targets to date.”