Australian coal operator Stanmore Resources Ltd. recently signed a Designated Area Agreement (DAA) with the Moranbah South Joint Venture (MBS JV), which is held 50% by Anglo Coal (Grosvenor) Pty Ltd and 50% by Exxaro Australia Pty Ltd. The DAA provides Stanmore with the rights to explore, study and then apply for a future mining lease over a designated area on the MBS JV tenements (MDL277 and EPC548), which is immediately adjacent to Stanmore’s Isaac South project on EPC 755 in Queensland, Australia.
“This transaction paves the way for the development of our Isaac South project in a more competitive and lower average strip ratio basis, as a natural capital efficient brownfield extension of our current Isaac Downs mine, prolonging the overall mine life at our Isaac Plains Complex,” said Stanmore CEO Marcelo Matos.
The MBS JV received $15 million in cash yesterday (September 4, 2024) at the DAA signing. The signing and completion were contemporaneous. The MBS JV will receive an additional $20 million payable upon first coal being mined or from ~10 years from the date a mining lease is granted over the designated area. The group will also receive a capped royalty of up to $40 million payable in the future linked to certain coal price thresholds.
If approved, the expansion would allow a large-scale mining operation across Stanmore’s Isaac South Project and the open cut Rangal coal measures.
The coal deposit sub-crops on the designated area, indicating a low strip ratio, which in turn lowers operating costs and may provide over double the volumes and mine life than the existing Stanmore tenement alone. The strip ratio in the designated area is expected to start off at only 4-5:1 raw coal, meaning the capital cost for pit development will be relatively low, with the time to uncover first coal relatively quick.
The project is located close to Isaac Downs and nearby the existing infrastructure of both the Isaac Plains Complex and Poitrel prep plant and train loadouts. Stanmore operates three metallurgical coal mines in Queensland’s Bowen Basin.
Stanmore said it will start the permitting process immediately. Ideally, the company would like to ramp up operations in time to ensure continuity of operations for its Isaac Plains Complex, which may potentially add another 15 years at the same rate of roughly 4 million mt/y of raw coal.
