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 holds extensive leases in the Canning Basin, Western Australia. These are known to host vast deposits of coal. The coal deposits are the core assets of the company and the focus of management's activities. The strategy is to develop an export thermal coal mining business as well as investigate the potential to develop underground coal gasification (UCG) and coal bed methane extraction.

Rey Resources also hold a 10% interest in petroleum exploration licences EP 457 and EP 458 which overlap the coal leases and are being farmed out to the firm's largest shareholder Gujarat NRE.

Rey Resources also hold exploration licences in Chile and Peru for which expressions of interest are being sought.

• Canning Basin Overview>>
• Duchess / Paradise>>
• Liveringa>>
• Underground Coal Gas (UCG)>>
• Coal Bed Methane>>

OIL AND GAS:

Canning Basin Oil and Gas Project (Rey 100%, farm out to 10%)

Rey Resources has two petroleum Exploration Permits (EP457 and EP458) that overlap its coal leases. Rey Resources has entered into a farm-out arrangement with Gujarat NRE Mineral Resources Limited, a significant shareholder of Rey Resources.

A Native Title and Heritage Protection Agreement for the Permits was signed in July 2007 and clearances for geophysical data acquisition in the field are planned for the first half of 2009.

Gujarat has paid $250,000 to Rey Resources and has the right to earn a 90% interest through the expenditure of $4.85 million over five years.

Rey Resources will retain rights to any gas recovered from coals (coal bed methane) together with the utilisation of any coal in any gas or liquid conversion process and will have the right to explore for and deal with any coal and coal seam gas in the permits subject to compliance with all applicable regulations.

The interest of the parties in relation to petroleum production will be 90% Gujarat and 10% Rey Resources, which 10% will be free carried until the grant of a petroleum production license.  Gujarat will have the right to a reimbursement of 10% of the costs incurred to the date of  production.

URANIUM:

CRA discovered a uranium anomaly at Myroodah in the 1970s. This work:

• Demonstrated mineralisation is associated with a redox boundary and haematite alteration indicating the potential for a classic roll front uranium deposit. 
• Returned grades up to 0.26kg/t U₃O₈ from limited drilling at shallow depth.
• Indicated approximately 9km of radiometrically anomalous strike length untested by drilling.

In addition Rey Resources has secured additional tenure in the district covering stratigraphically equivalent positions providing potential upside for strategic regional positioning.

Rey Resources is seeking expressions of interest in this prospect.

COPPER IN SOUTH AMERICA:

Rey Resources is seeking expressions of interest in its South American projects.

• Chile

The Chilean portfolio comprises four projects strategically located in the Atacama Region of northern Chile and proximal to the mining centre of Copiapo. The projects are located in a region of high prospectivity with three projects located in the Chilean Iron Belt which hosts the world class Candelaria deposit. Two other projects are situated in two of Chile's most productive porphyry copper belts.

• Humito

The Humito project is a copper porphyry project located 90km north of Copiapo, approximately 10km to the south of the village of Inca de Oro, an historic mining centre. A sealed highway passes the western margin of the tenements. Tenure comprises 17 tenements for a total area of 4,500ha.

The only recent exploration over the area was undertaken by Kennecott in 1987. Assays varied considerably between holes, a reflection of the alteration zone in which they were drilled with maximum assays of 1400ppm Cu and 2200ppm Mo. In addition to intense pyrite mineralisation associated with quartz sericite alteration, relict chalcopyrite was noted in petrographic samples. The geometry of the alteration assemblage together with what appears to be a central silica cap is indicative of an intact porphyry hydrothermal system preserved at high levels. 

The Humito prospect is believed to be a well preserved high level porphyry system displaying the classic porphyry alteration pattern complete with silica cap. The presence of remobilized primary chalcopyrite and the geochemical results suggest that near surface, the system is leached of copper. There is therefore potential for a secondary zone of copper enrichment at depth.

The large alteration system, occupying approximately 20km2, has only been tested by Kennecott with nine shallow RC holes concentrated on the Cerro Humito area and is effectively untested. The project lies within a metallogenic belt of demonstrated prospectivity including a large porphyry system of reportedly 400Mt grading 0.6% combined Cu and Au, at Inca de Oro, 12km north of Humito. The Humito project has excellent potential for the discovery of a porphyry copper system.

Mr. Julian Kinnear Ludowici
Chairman, Non-Executive

Mr. Kevin John Wilson
Managing Director, Executive

Dr. Bruce Clement Preston
Technical Director, Executive

Mr. Alan John Humphris
Non-executive, Independent

Mr. James Timothy McClements
Non-Executive

No info available.