Adelaide-based Centrex Resources Ltd was founded in 1996 and,...

Adelaide-based Centrex Resources Ltd was founded in 1996 and, according to Managing Director Graham Chrisp, the company's primary interest back then was the Lock coal deposit in the middle of the Eyre Peninsula in South Australia. ''We still have that coal deposit and we're working on that as a supply of coal for a power station in Port Augusta'', he explained. ''As part of that work, we became interested in the potential for coal seam gas (CSG), so we applied for a couple of PELs, covering about 10,000 km2 which we think have significant CSG potential.'' This area covers Lock, as well as some other coal deposits located close to Whyalla and Port Pirie.

Coal and coal seam gas

The Lock coal deposit contains between 260 and 600 million tonnes of sub-bituminous coal, as well as considerable additional tertiary coal. The coal contains high volatiles and is believed to have been previously covered by approximately 500 m of overburden. This overburden is now between 50 and 200 m and the deposit potentially contains substantial quantities of CSG.

Centrex currently holds 100% of PEL 126 and PEL 153 permits. ''We are actively looking for partners to come in and help us with the exploration and development'', said Mr Chrisp. The most significant prospect we have identified is the Polda Basin. It is quite deep in places and it's also covered with a combination of sands and quite thick clays, which could act both as reservoirs and an effective seal. The coal measures in the Polda Basin comprise lignites over sub-bituminous (Jurassic) coal.''

Other important prospects are in the Cowell and Port Pirie areas. ''They're really three separate projects although they're under the same tenement'', he explained. These areas contain substantial tonnages of deep lignites and oil shales.''

Despite not yet having drilled any exploration wells targeting CSG, during coal exploration in the Polda Basin, material from two wells had a petroliferous odour and another had a gas smell. Another area in the tenement (near Whyalla) also produced gas when sampled. ''Part of the Polda Basin has undergone quite a lot of drilling, so we understand that area reasonably well'', stated Mr Chrisp, ''and Centrex could spend between half a million and one million dollars on CSG exploration in the near future.

Iron Ore

Mr Chrisp believes that Centrex is the first company to seriously look for CSG in South Australia and, despite Queensland being more established [with CSG], Centrex decided to focus on SA due to the company's current coal and iron ore interests. ''We believe the potential is quite good for CSG in South Australia.''

''We also have associated companies that have substantial iron ore deposits on the Eyre Peninsula and we were looking for a source of gas that might be useful in the processing and upgrading of that ore … [so] there's a possibility that we might use the gas ourselves'', said Mr Chrisp. ''We have a number of industrial projects that we're interested in establishing if we could show that the gas exists there, so we wouldn't actually have to distribute it into a network.'' The Port Pirie area is also very close to the existing pipeline and the deposits north of Cowell are reasonably close to the industrial city of Whyalla.

The company holds several tenements over substantial iron ore deposits on the peninsula, which are projected to contain 100 million tonnes of hematitic ore and 1 billion tonnes of magnetite ore. These deposits are close to existing infrastructure and ports.

Looking ahead

Initially Centrex will focus on its South Australian acreage, having got quite a bit to go with in the area.

''With our substantial iron ore and coal interests I would like to see us become a substantial energy producer in the Eyre Peninsula region'', Mr Crisp said on the future of the company. ''I think a combination of the iron ore project with CSG is looking very positive. Within perhaps 18 months we could be producing iron ore, and that's about the time when I'd like to be looking at energy sources for processing that iron ore.''

HUGE GAINS ARE EXPECTED


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