Bathurst closes JV deal on Jameson Resources’ coal project in Canada

Workers at the Crown Mountain coaking coal project

Bathurst Resources has executed a joint venture deal with Perth-based Jameson Resources to finance the development of a coking coal project in Canada.

Through the JV, Bathurst now holds an 8 per cent stake in Jameson’s Canadian subsidiary NWP Coal Canada, which includes its key investment, the Crown Mountain coking coal project.

Bathurst has provided NWP with an initial investment of $C4 million ($4.1 million) – which was paid through Bathurst’s cash reserves – to fund the project’s summer exploration programme.

New Zealand’s largest coal company will then own a 50 per cent stake in NWP’s Crown Mountain project upon making a total investment of $C121.5 million. The funds will be allocated to the project’s bankable feasibility study and construction activities.

The Crown Mountain project will provide Bathurst with a diversity of production into the export market, particularly Asia.

Currently, the company exports more than 70 per cent of its coal for steel production in Japan, India and Asia, while the remainder is sold to the local agricultural and energy industries.

Bathurst manages seven mines in New Zealand, and has over 2.2Mt/y of coal under management.

Meanwhile, the Crown Mountain project has shown to be a low-cost coking coal mining operation with robust economics, with an indicative pre-tax net present value (NPV) of $US845 million ($1.1 billion), $US544 million and $US233 million at 60 per cent, 50 per cent and 40 per cent plant yields respectively.

It is expected to produce 1.7Mt/y of coal over a mine life of 16 years. Construction at the site is scheduled to commence in 2019, with first coal production due by late 2020.

The project is in the Elk Valley coal field in south-eastern British Columbia, within 20km of two significant coking coal mines, Line Creek and Elkview.