Coal mine drilling to start near Longtown this year

SHARE THIS STORY
Gary Fietz
Gary Fietz

Drilling on a cross-border coal mining project worth hundreds of millions of pounds is set to get underway.

Australian company New Age Exploration (NAE) is carrying out "pre-drilling work" at the Lochinvar coalfield - between Longtown and Canonbie - with a program planned for the end of this year.

The firm has also said this work has the potential to increase the value of the project and make it a working mine faster.

These comments were made in a statement to the Australian Securities Exchange (ASX), which said: "The planned exploration program has the potential to increase the value of the Lochinvar project by increasing the resource base and by identifying shallower coal nearer to the railway reducing project capital costs and shortening the development timeframe to first coal production."

Gary Fietz, NAE's managing director, said: "NAE expects to re-commence site based exploration activities at Lochinvar later this year. This includes; drilling and possibly also some new seismic lines."

He added that this would take place in the fourth quarter of this calendar year.

NAE - based in Melbourne - has a licence to explore the Lochinavar field for coking coal, which is used to produce steel.

It carried out a scoping study, which examined the feasibility of any mine, in 2014. The following year the project was put on hold following a dramatic fall in the price of coking coal as a commodity.

Last year though it resumed its activities after a recovery in the price.

A study published in March gave a net value of the mine of $410m (about £246m), an increase from the $263m (about £209m) figure which was given three years ago. It is estimated that the mine would produce 1.4 mega tonnes (Mt) over a 26 year period with an estimated a benchmark price of $160 (£127) per tonne of coal.

The earliest a mine was said to be likely to open is 2022.

This new work will see between four and seven boreholes drilled into a shallow part of the coalfield which is about 1.6 miles from an existing railway line.

The programme has a budget of 1.2m Australian Dollars (more than £680,000). Mr Fietz said the company has raised most of this, with the remainder to come from a new share issue.

He added: "We have retained the Lochinvar Coal Office near Kilpatrick Fleming where the drill core is stored and once we re-commence drilling, the office will be opened again.

"We expect to have a small geological team and a drilling contractor in the area again and possibly also a seismic crew for a short period."

Comment on this article

Generate a new code
Comments not OK? Click here to let us know
Read this...
Business most read