Pembroke targets first output at Olive Downs in 2020

PERTH (miningweekly.com) – Unlisted Pembroke Resources could be in production as early as 2020, as the miner advances plans to bring its Olive Downs project, in Queensland, into production.

Pembroke CEO and chairperson Barry Tudor told Mining Weekly Online on Wednesday that the company had initiated the approvals process for the Olive Downs mine, which it acquired from US producer Peabody Energy in May 2016.

Pembroke struck a A$120-million deal with Peabody Energy and Citic Resources Holdings to acquire their interests in metallurgical coal tenements collectively know as the Olive Downs complex.

While Pembroke has nailed down the Olive Downs South and Willunga deposits, an 87.3% stake in the Olive Downs North project ss still outstanding, subject to the approval of minority interest holders.

Tudor told Mining Weekly Online that the development currently under consideration included only the Olive Downs South and Willunga deposits, which are estimated to host a combined Joint Ore Reserves Committee-compliant resource of nearly one-billion tonnes, and a reserve of more than 500-million tonnes.

The plans presented to various state and federal agencies will see Pembroke develop a 14-million-tonne-a-year operation, over various stages, with the project expected to have a mine life of over 30 years.

“We are currently finalising the prefeasibility study, but we are probably looking at three stages [for development]. But it is variable,” Tudor said.

“What we like about this asset is that it is quite adaptable to market conditions. Because of its characteristics, it’s not like you are building a longwall on day one, and you have to start with a bang. You can ramp up, turn the knob harder if you choose and accelerate or increase production depending on the circumstances.”

While Pembroke is initially targeting a 2020 production start, Tudor noted that this could be whittled down to only six months, albeit at a much smaller scale, should the transaction for the Olive Downs North project proceed.

The reason for this is that the Olive Downs North project includes the rights to two mine leases, with coal likely to be trucked to a nearby processing facility.