Aston chief executive Todd Hannigan said extensive design work for Maules Creek, which is targeting environmental approval by the end of 2011, was also undertaken as part of the feasibility study.
“The advanced status of the design and procurement of the CHPP [coal handling and preparation plant] and related mine site infrastructure underpins our confidence in the project,” he said.
Hannigan described the finalisation of the DFS as “an important milestone”.
"It highlights the compelling project economics, with the improved coal quality more than offsetting some of the industry-wide cost pressures we have experienced,” he said.
The DFS estimates Aston’s 85% share of total outstanding capital expenditure to first coal to be $553 million (including contingency) before allowing for pre-commencement working capital items.
The increase in the capital expenditure estimate reflects the higher production profile, higher land acquisition costs, the requirement for a rail viaduct, higher bulk earthwork volumes and adverse geological conditions.
Hannigan said the DFS confirmed that Maules Creek’s 20-year average free on board cash costs were expected to be about $62.9 per tonne (excluding royalties), positioning Aston in the first quartile of Australian metallurgical coal producers.
He said the mine was now expected to produce 84% semi-soft metallurgical coal over the first 20 years of production, improving its overall margins in a period of tight supply of metallurgical coal.
“The upgraded coal quality and production profile firmly establish Maules Creek as a strategically important metallurgical coal asset,” he said.
“The quality upgrade positions Aston as a pre-eminent semi-soft coking coal market player, enabling shareholders to capitalise on attractive coking coal market dynamics.”
The major project design for Maules Creek – which is located in the Gunnedah Basin – is substantially complete and all land purchases expected to be required for project approval have been secured.
Maules Creek’s consistently low strip ratio of 6.4:1 over the first 20 years means these cash costs are likely to remain relatively constant, in real terms, over time.
Sedgman scored the procurement contract worth $30 million for Maules Creek in May after being awarded the $18.5 million design contract for the CHPP in April.
