Ann: South Burnett Project Pre-Feasibility Exceeds Expectations, page-11

Coal miner Moreton Resources makes $3b pitch to State Government
December 21, 2015 8:39pm
JOHN McCARTHYThe Courier-Mail
Moreton believes the project could deliver revenues of $12 billion over 40 years.
A NEW coal discovery near Kingaroy could save the State Government’s Stanwell Corporation up to $3 billion through a proposed 20-year offtake agreement – and save a state forest.
Moreton Resources has completed a pre-feasibility study (PFS) on the $250 million South Burnett Coal project, which it claims could serve Stanwell’s Tarong power station far cheaper than its current supply from the Meandu mine, which is owned by the government-owned corporation. Between 300 and 500 jobs would be created during construction and another 300 in operation.
The savings compared with Meandu are believed to be as much as $75 million to $100 million a year and would save Stanwell from expanding the Meandu mine into state forest.
However, Stanwell disputes Moreton’s cost claims and said it was more than comfortable with economic coal within Meandu to supply the Tarong power stations until 2037.
Moreton said that with a 20-year offtake agreement the savings would be between $2 billion to $3 billion’’.
The project has a probable coal reserve of 290 million tonnes and the pre-feasibility study showed it would be able to generate profits of up to $2.4 billion over 40 years, with revenues of about $12 billion.
Moreton said the pre-feasibility study was done with a focus on domestic supply but the company is now reviewing its options to maximise the potential 880 million tonnes of indicated resource.
The project is also just north of the Tarong power station and would be viable at a benchmark coal price of $50 a tonne.
The latest study had slashed costs from its development and showed the resource contained a high energy yield for domestic or export.
“Considerable environmental and community advantages are apparent with this process, which has been a guiding factor when deciding the operation decisions at the pre-feasibility level,’’ Moreton said in an ASX statement.
“The PFS currently validates an $11-12 billion project revenue over 42 years at an anticipated 5.5 million tonnes a year of coal production.
“This rate of production would consume only 33 per cent of the total reported coal resources.’’
Moreton’s shares fell 0.1¢ to 0.4¢ on Monday.