The 50,000tpm output target was decided after the company completed an updated mine plan for the ADK mine, which had previously been producing at a monthly rate of approximately 30,000t.

The new output target is tipped to begin next month.

Orpheus only announced that it had entered into a heads of agreement to acquire a 50% interest in the mine on March 8, 2012.

While equity holding and operational due diligence needs to be finalised, the JV with the company’s Indonesian partner PT Mega Coal is set to establish Orpheus as operator of a conventional truck-and-shovel mine.

The company is entitled to 50% of the net profits from the ADK mine, and plans to achieve a minimum $A15 per tonne cash profit margin.

Two open pits are mined at ADK, which has been in operation since April 2011.

Orpheus said the coal would be sold on the spot market while negotiations with long-term offtake parties were settled.

Orpheus executive chairman Wayne Mitchell said he was looking forward to the company and its shareholders reaping the rewards of ADK.

“We are excited that Orpheus’ new coal production can provide anticipated cashflow from the ADK project,” he said.

“Our next step is to bring B2 [coking and thermal coal project in East Kalimantan] back into production as we target a rate of 1,000,000 tonnes per annum from the company’s projects by the end of 2012.”

Orpheus is a subsidiary of Australian explorer Coalworks and has projects in both Indonesia and Australia.