After completing the acquisition of 75% interest in Winchester South Project from Rio Tinto in June 2018, Whitehaven Coal Limited (ASX: WHC) has today announced the mining consultant commissioned for the project.
As per the statement, Xenith Consulting Pty Ltd has been appointed to undertake the maiden coal resource estimates for the project in accordance with the JORC Code (2012).
Winchester South Project is a high-quality metallurgical coal project that is located in Bowen basin in Queensland. It is approximately 200 kilometres south-west of Mackay and 30 kilometres south-east of the major regional township of Moranbah. The project is bounded by MDL 183 that is within an active mining area.
Coal Resources at Winchester South is now estimated to total 530 Mt consisting of 130Mt in the Measured Category, 300Mt in the Indicated Category and 100Mt in the Inferred Category.
These estimations are based on the review of existing geological data undertaken by the new consultant Xenith. Rangal Coal Measures and Fort Cooper Coal Measures are the two seams where the coal resources of the project are found.
Rangal seams is grouped into three seams including Leichhardt (L), the Upper Vermont seam (VU) and the Middle and Lower Vermont (VML) seams. So far more than 1,200 boreholes have been drilled through the Rangal seams. That translates the extensive drilling undertaken by the previous owners which includes over 60 kilometres of seismic lines used to understand the geology and calculate the Resources.
Whitehaven’s development strategy for the Winchester South Project is to build a high quality, large scale, low cost coking coal mine.
For Fiscal 2019 the company targets to undertake the full review process and update the JORC resources. It further intends to complete all the approvals and studies on fast track basis so that it can move towards the development phase.
In the long run, Whitehaven targets to become a leading producer of High Efficiency Low Emissions (HELE) coal in Australia. Recently it has committed to reduce the carbon emission to a considerably low level as implied by Australian Securities and Investments Commission (ASIC) new ruling. It includes the introduction of Taskforce on Carbon-related Financial Risk Disclosure (TCFD) under which companies are required to investigate the climate related risk in all possible scenarios and draft them including the action that needs to be undertaken in regard to Paris agreement signed by 24 countries.
China, India and Japan represent the world’s largest consumers of coal. In 2016 out of total global coal consumption of 5,365Mtce, 66% of the coal was consumed by these three nations. Further, IEA’s New Policies Scenario projects that world’s coal demand is expected to increase to 5,612Mtce by 2040.
In the last concluding year Whitehaven has shipped and marketed more than 20 million tonnes of coal, leading to achieve $2,257.4 million revenue. Its managed coal sales have grown fivefold since FY2012 the year prior to commercial production at Narrabri.
Looking into FY19, Whitehaven forecasts saleable production on a managed basis to range within 22Mt and 23Mt.
In today’s trading session, WHC plunged 6.897% to close at $4.860 on 25 October 2018.
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