Under the feasibility study Aquila is looking at a multi-seam longwall mine initially producing 4Mt per annum of hard coking coal from one longwall, to be installed in 2014, and up to 8Mtpa once the second longwall is installed in 2020.
Mine construction is targeting 2011 with first coal mined in 2012.
The feasibility study uncovered some better options than envisioned from pre-feasibility work.
Aquila said the project had prioritised a new target seam, the Harrow Creek Upper, resulting in the upgraded forecast for initial mining to produce at least 4Mtpa, but it could also reach 4.6Mtpa.
The project is located in Queensland’s Bowen Basin and is half-owned by Aquila and Brazilian mining giant Vale.
Aquila said the hard coking coal product would be similar to that produced at BMA’s adjacent Peak Downs mine that has had a lot of interest from end buyers.
Using a base case of a single longwall operation for project cost estimates, the feasibility study indicates capital costs will total $A977 million, with $722 million for construction, $100 million for engineering, procurement and construction management costs, and another $155 million for contingency expenses.
The mine has been estimated to produce hard coking coal at $73 per tonne free-on-board.
Mining costs are targeting $34.50/t, processing and rail costs $32.95/t, and port and other associated costs excluding royalties are targeting $5.75/t.
At production levels of 4Mtpa, Aquila said Eagle Downs would generate annual earnings before interest, taxes, depreciation and amortisation of $350 million at current hard coking coal prices and using an exchange rate assumption of US70c to the Australian dollar.
Aquila used a variety of consultants and contractors for the feasibility including JB Mining Services and CSIRO for the geology component, IMC, Runge, Geogas and Roy Moreby for the mining side.
AusTagg undertook the coal handling and processing plant feasibility work, Hansen Bailey completed the environmental component while Sinclair Knight Merz performed the underground and surface infrastructure feasibility work.
Using work completed by Runge, a new maiden reserve statement for the project has been announced with the total coal reserves of 158Mt consisting of 99Mt of proven reserves and 60Mt of probable reserves.
Measured and indicated coal resources have also been boosted 30% to 450Mt while the overall resources of 883Mt represent a slight increase.
From five seams the project has 285.8Mt of measured resources, 164.5Mt indicated and 433.5Mt in the inferred category.
Shares in Aquila are up 33c this morning to $7.25.
