Dual-listed Bathurst Resources is targeting two million tonnes' annual production of premium hard coking coal for export from the West Coast by 2013, rivalling its neighbour and state-owned enterprise Solid Energy.
While still to gain consents and begin mining, the rise and rise of Bathurst continues, with its share price leaping 66% since early December to $1.40 yesterday, after the completion of several tenement acquisitions for $NZ96.3 million and raising $NZ242 million.
The devastating Queensland floods have wiped hundreds of millions of dollars off Australia's export coal sector, at a time of huge global demand, with prices at $US225 per tonne expected to head towards $US500 in the year ahead.
Craigs Investment Partners broker Peter McIntyre said investor inquiries had been high, as people better understood the importance and need for hard coking coal around the world.
"Just do the math on the estimated volumes. It should be a profitable operation, especially using open-cast mining methods," Mr McIntyre said.
For the two quarters to December, Bathurst spent $A43.5 million on its West Coast project; gained $A108.1 million in funding and held $A72.8 million in cash.
In its quarterly report to the end of December, Bathurst outlined its target to be producing coking coal from the Buller project on the Denniston plateau by December this year, with production rising from 650,000 tonnes to one million tonnes at the beginning of 2013 and two million tonnes by the end of that year.
Following recent Overseas Investment Office consent and Crown Minerals approval for transference of mining permits, Bathurst now has to gain two "key approvals" - local council resource consents, including environmental approvals, and access and concession permits from the Department of Conservation.
"The coal produced from Buller will be of a premium quality and is in high demand from steel manufacturers around the world as it is the preferred feedstock for use in steel-making in high-end custom coke manufacture," Bathurst said.
Solid Energy's open-cut Stockton mine at Buller produces about two million tonnes annually. Both companies will be mining the same coal seams from adjacent tenements.
Once production of two million tonnes is reached, Bathurst's aim is to turn attention to the North Buller tenement and double production by taking a further two million tonnes annually from that area.
"Exploration drilling to increase the [North Buller] resource base and confirm the coal qualities of those blocks will be undertaken in the second half of 2011," the company said.
One drill rig is already operating at Whareatea West and a second is scheduled to begin work shortly.
Acquisitions by Bathurst Resources
November: $A35 million for Eastern Resources Group (a subsidiary of Galilee Energy Ltd) for its Whareatea West exploration permit, the operational Cascade mine and Takitimu thermal coal mine.
December: $US40 million - for 100% of L&M Coal Ltd and its Buller coalfield. Two more payments of $US40 million each once in production.
Coal estimates 72.8 million tonnes (MT)
North Buller: North Buller, Blackburn, Millerton North - total 28.9MT.
South Buller: Escarpment, Deep Creek, Whareatea West - total 43.9MT.
Cascade and Takitimu mines produce 200,000 tonnes annually - total 3.2MT.
