Last month the Perth-based junior inked an agreement with L&M Coal Holdings for a joint venture on the project, which covers 10,000 hectares in permits that “largely surround” the 2 million tonne per annum coking coal Stockton mine.
In an update yesterday, Bathurst said it would focus on this project and studies showed it could be developed and in production within 18-24 months.
The junior has an exploration target of 50-90Mt and noted the coal from the Buller region was low ash and high grade.
Bathurst plans to target the same seams as Stockton, which exports to steel mills around the world.
A due diligence review is underway, while the agreement with L&M is expected to be completed by April 30.
Under the deal, both parties will develop the project, but Bathurst gains the exclusive right to execute a sale and purchase agreement to acquire L&M.
Upon such an acquisition, Bathurst said it would pursue a New Zealand listing.
The junior also inked a deal last month to scoop up CIT Capital holding company BD Acquisition, which owns the Black Diamond coal mine and other exploration assets in the Appalachian Basin in Kentucky.
Following the bankruptcy of Black Diamond Mining Company in February 2008, BD Acquisition established eight underground and three open cut mines on the Kentucky tenements, hitting capacity of 2.5 million tons per annum.
A $US19 million, 9000 tons per hour coal preparation and rail load-out facility at Spurlock was added along with an upgrade to the Ivel plant to 500tph capacity.
Bathurst said BD Acquisition was planning to increase output to more than 5Mtpa through 19 mines by 2010 and had spent more than $25 million in the process, but the operations had all been on care and maintenance since July 2009.
Holding 56,000 acres of coal reserves for some 115Mt of recoverable coal reserves, Bathurst expects to kick off coal mining within three months of the completed acquisition.
The company seeks to use contractors and to start open cut mining to hit production of 200,000 tons per month within the first 18 months.
Ultimately the Aussie company is aiming to hit 3Mtpa of production from the Black Diamond assets, leading to a mine life of more than 30 years.
Total proven underground coal reserves are at 32.6Mt, including 23Mt at Spurlock, 7.02Mt at Mud Creek and 2.57Mt at Highway 80, while total proven surface reserves of 21.1Mt include 11.37Mt at the Ivyton site.
Bathurst recently issued 12.5 million ordinary shares to “sophisticated investors” at A8c each, raising $1 million.
Shares in the company are up 1.3% to 8c this morning.
