The estimate provided by JB Mining Services, acting for Whitehaven, was 82Mt of inferred resource compared to Coalworks’ independent expert Ravensgate’s reckoning of 300Mt of inferred resource.
The major differences between the two valuations for the underground mine revolve around minimum seam thickness cut-off levels and the depth of the resource.
Whitehaven, which is currently making a $172 million hostile takeover offer for Coalworks, inherited the farm-in rights to a 25% share of the Ferndale project when it acquired Nathan Tinkler’s Boardwalk Resources as part of its $5.1 billion merger with Aston Resources.
It commissioned its own resource estimate of the project as it sought to satisfy the farm-in requirements and development milestones that were needed to lift its share of the project to 50%.
“In arriving at its estimate, JB Mining Services made a number of assumptions in its modelling which are considered by Whitehaven to be generally more appropriate for this development than those used by Ravensgate in its study,” Whitehaven said.
“In particular, the different criteria used to assess the potential for underground mining led to a significantly lower estimate for the resources within the Whittingham coal measures.
“In addition, JB Mining Services had access to the latest drilling and geological data for the project, some of which was not available to Ravensgate at the time it completed its report.”
Whitehaven managing director Tony Haggarty said Ferndale would be relying on JB Mining Services’ geological models and JORC resource estimate for ongoing mine planning and development.
“This initial JORC resource estimate prepared for Boardwalk Ferndale is consistent with Whitehaven’s expectations from its review of the project during due diligence for the Boardwalk acquisition earlier this year,” he said.
“JB Mining Services has conducted a robust resources estimation process for the project and its work provides the joint venture with a good starting point to commence the next phase of mine planning and development.”
Coalworks said the difference between the estimates was mainly due to the different method of analysis used by JB Mining which was based on a 1.8m minimum seam cut-off, whereas Ravensgate used a 1m seam width cut-off which included a greater quantity of coal that was excluded by the JB Mining report.
The JB Mining report also excluded coal deeper than 400m and therefore excluded a substantial amount of coal from the Bayswater seam, it said.
“It is well known in the industry that underground mining of coal can be achieved down to 1m cut-offs or less and accordingly Coalworks reaffirms that the 743Mt estimate provided by Coalworks has a firm foundation,” the company said.
“Coalworks expects further JORC resources be delineated within the 743Mt JORC resource to show optimal mining zones and it appears that the JB Mining report is already seeking to do this.”
