Drilling at Bluff has confirmed the presence of high-quality PCI coal at depths amenable to open cut mining. Exploration has also indicated that the target coal deposit extends into the neighbouring subâ€block.
“Given the shape of the Bluff tenement, the missing subâ€block had presented a challenge for the company in terms of mine planning,” Carabella said in a statement.
“Prior to this acquisition, a two pit operation (north and south) had been contemplated at Bluff.”
The amalgamation of the subâ€block enables the resource to be developed to its full potential and substantially enhances the overall value proposition for the Bluff project, Carabella said.
The new Bluff project area will not only have an increased resource size but also an optimised pit design.
The ability to access a larger contiguous coal resource area provides the opportunity for higher resource recovery, longer project life and lower operating costs, the company said.
Subject to the satisfactory completion of due diligence, Carabella will pay the owner of the sub-block -- Christopher Wallin -- $9.4 million in CLR shares over time, subject to the achievement of several milestones.
“The timely development of Bluff is a key element of Carabella’s short to medium term strategy. Importantly, in the current challenging environment, the development of a high margin, low capital operation at Bluff will allow the company early access to cash flow,” the company said.
The expanded resource is expected to support the concept mine design of a 1 million tonnes per annum operation over a minimum 10-year mine life.
Carabella expects to lodge a mining lease application in the first half of 2013, with first operations commencing late 2013 to early 2014 subject to the outcomes of the feasibility study.
“Carabella has also opened discussions with various parties regarding potential operations and infrastructure services for the project,” it said.
