The Polish government has awarded the rights to explore and develop the Nowa Ruda coal project to Australian Securities Exchange-listed Balamara’s polish subsidiary Coal Holdings.

With the deal done Balamara is planning a corporate restructure including the divestments of its existing base metal projects in central Europe and Australia.

It may have to restructure further, however, should a bid for a phosphate project in Togo be successful.

Nowa Ruda is located in the Central Sudeten range within the Lower Silesian Coal Basin near the Czech Republic border.

It was a producing underground coal mine for a large part of the last century.

The mine was placed on care and maintenance at the end of 1995 due to lower coking prices along with the excessive and inefficient cost structures attached to the project.

The structures were established by the former communist government almost 50 years ago.

The project covers a land area of about 20sq.km. Infrastructure in place includes roads, rail, power and water.

The exploration licence can be converted to a mining licence subject to the successful completion of a feasibility study.

Balamara believes running the project more commercially to fix up the overall cost structures, coupled with considerably higher prices for the end product, will make the project more of a goer.

To get the process going Balamara has to collate the existing database and conduct confirmatory drilling to deliver a JORC resource.

Then will come the bankable feasibility study, the search for funding and mine rehabilitation and recommissioning of all plant and infrastructure.

Balamara already has cash in the bank thanks to a recently completed $A5.26 million ($US4.87 million) rights issue to carry it through to feasibility.

Managing director Mike Ralston said the award of exclusive rights to develop the Nowa Ruda project represented a major breakthrough development for the company.

“The advanced nature of this project represents a distinct advantage and will enable us to progress it more rapidly from this point,” he said.

“It is also important to note that adding Nowa Ruda to our portfolio does not in any way change our position with respect to the Togo phosphate project, for which we still remain deeply committed as we navigate the final stage of the tender process.

“The company does acknowledge, however, that if it is successful in the Togo phosphate tender we will need to consider corporate restructuring within Balamara as we cannot ultimately focus on delivering two diverse tier one projects together within the same vehicle.”