www.reyresources.com
Rey Resources (ASX: REY) is thermal coal development company with a large resource and major land position of 8,000km2 in the emerging Canning Basin of Western Australia. A Pre Feasibility Study on the firm’s maiden 511Mt JORC resource at Duchess Paradise was completed in January 2010 and revealed a 2Mtpa highwall mining export thermal coal operation, commencing production in 2013, to be financially robust. Capital costs are estimated at A$113 million and operating costs at A$60/t FOBT Derby, where Rey has its own port and loading facility. A major exploration program in 2010 over 100kms of subcrop will seek to extend the 8 year life of the proposed operation and add new resources.
Rey Resources raises A$12m in oversubscribed placement for Canning Basin
Exploration at the potential massive thermal coal resource at Canning Basin is now securely funded after Rey Resources (ASX: REY) completed an oversubscribed A$12 million capital raising at $0.20, issuing 60 million new shares.
Rey said funds will be primarily used to conduct further exploration drilling in the Canning Basin, continue environmental surveys and assessments in the area and complete the definitive feasibility study, which is due to be released at the end of June 2011.
The Canning Basin in Western Australia is ideally placed for export to coal strapped markets of India (and China), with a pre feasibility study identifying project viability on a 511 million tonne thermal coal JORC resource, with an initial highwall mining operation of 2 million tonnes per annum with a 20 year minelife.
Export to these markets was estimated to have a pre tax net present value of $88 million at A$/US$ 90c and US$80/t (Newcastle 6,300gar).
Kevin Wilson, managing director commented on the capital raising by saying, “We have a number of important milestones to complete over the next six to twelve months as we progress the potential Duchess Paradise project (within the Canning Basin) with the objective of commencing production at the end of 2013.
"I would like to take this opportunity to thank the existing investors for their continued support and welcome our new international and domestic institutions onto the register."
