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 approvals process on track for Duchess Paradise coal project
Rey Resources (ASX: REY) has confirmed that its Duchess Paradise thermal coal project is unaffected by the West Kimberly National Heritage Listing announced by the Federal Environment Minister yesterday.
This decision, along with the recent Western Australian Environmental Protection Authority’s (EPA) level of assessment advice for the project as Public Environmental Review (PER), is in line with Rey’s expectations and provides further certainty to the company.
The company is confident the assessment process will demonstrate the project meets the EPA’s objectives for protection of the environment.
Rey is preparing to progress the project through the approvals process as the proposed mine site and associated transport route is outside the area to be included in the Heritage Listing.
Kevin Wilson, Rey Resources’ managing director, said “importantly the State process provides an opportunity for the project to be considered within the established PER framework, and we are continuing to work with the EPA to progress through the approvals process.”
“The company is looking forward to demonstrating that the project can be implemented while protecting the environment and meeting expectations of key stakeholders including Traditional Owners."
There will be an eight week public review period of the PER, expected to be in 2012.
Rey Resources has contributed to the Federal Government’s National Heritage Listing assessment of the West Kimberley over a period of two years.
A section of the Derby Port area is included in the Heritage Listing and this relates to past activities and associated historical values.
Rey has received advice from the Federal Department of Environment that new development cannot affect these values and would not need to be assessed by the Federal Minister. As a result the company believes this will not affect plans to export from the Derby Port.
The proposed Duchess Paradise Project is a thermal coal, low impact slot mining and underground operation with a planned production rate of up to 2.5 Mtpa. It is located on a remote pastoral station, 175 kilometres by road southeast of Derby.
The preliminary mine plan for the Duchess Paradise Project has been designed to have the smallest practical footprint, on land that has been grazed by livestock for well over 100 years, and does not impact on any environmental protection areas.
Rey has recently commissioned an independent economic analysis of its proposed Duchess Paradise Project using early mine plans and financial data.
This analysis has estimated the project will create employment for about 300 people during the initial construction phase starting in 2013, and an estimated 300 further jobs over the mine life.
In July Rey received a major vote of confidence from investors with firm commitments for a A$8 million placement, comprising 40 million shares at $0.20.
Rey recommenced its 2011 drilling program in June, after the wet season, at Duchess Paradise to expand shallow coal thermal coal reserves to extend the 10 year life.
The completion of the Definitive Feasibility Study at Duchess Paradise in June confirms it as being an economically robust thermal coal export project, with a longer life than expected, and strong cashflows estimated with EBITDA at $504 million over the first 5 years of sales.
