Bathurst to jointly develop Canadian coking coal mine
New Zealand-based coal producer Bathurst Resources has entered into a joint venture with Australia-listed Jameson Resources to develop the Crown Mountain coking coal mine in Canada's British Columbia province.
The mine is expected to begin exporting by 2022 and produce mainly hard coking coal with a high coke strength reaction (CSR) and low volatile matter.
Bathurst's initial first payment of C$4mn ($3mn) to the project was completed in July 2018, which has so far funded the summer exploration programme. Bathurst will make two more payments in stages to eventually achieve 50:50 ownership. Bathurst expects to invest a total of C$121.5mn in the project.
This is in line with Bathurst's aim to accumulate more metallurgical coal assets, with met coal prices expected to remain in a high range of above $170/t fob Australia over the next few years, the company said. Cost of production at Crown Mountain is estimated to be about $75/t.
The mine is located close to Canadian mining firm Teck Resources' Elkview mine, in a mature mining region that gives the project good access to established transport infrastructure.
Crown Mountain is currently Bathurst's only coal investment outside New Zealand.
Jameson Resources has been doing feasibility studies for Crown Mountain since the fourth quarter of 2013, with the joint venture with Bathurst allowing it to benefit from the added injection of capital.
Bathurst exported 316,000t from its Stockton coking coal mine in New Zealand during the October-December quarter and 621,000t for July-December, putting it ahead of its target of 1.12mn t for the 2018-19 fiscal year ending 30 June. About 15pc of this output was premium hard coking coal, while about 65pc was semi-hard and 20pc was high-ash coking coal.
The firm received an average price of NZ$200/t ($137/t) for its exported hard coking coal for October-December. But firm prices towards the end of the quarter allowed it to lock in forward sales of 198,000t at NZ$267/t. The strong price environment has allowed the firm to increase its earnings before tax, depreciation and amortisation forecast for 2018-19 by 14pc to NZ$105mn.
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