MetRes has signed a contract with Coal Augering Services (CAS) to provide auger services to the Mavis Downs and Millennium coal mine in Queensland.
The company purchased the Mavis Downs and Millennium coal mine from Peabody Energy in April.
MetRes is a joint venture (JV) between M Mining and Stanmore Coal.
The contract was signed by M Mining which is the JV manager and operator of the proposed mining activities.
M Mining director Matt Latimore said the contract with CAS will progress MetRes’ transition to underground mining at Mavis Downs and Millennium.
“The agreement with CAS provides a low-cost, competitive mining option with no need to strip overburden and no capital outlay,” he said.
“The scheduled auger production over the next 12 months provides us with baseload coal tonnage and will provide significant operating cashflows to support the transition to underground mining in mid-2022.”
The site is slated to restart operations in July 2021 and is currently in care and maintenance.
M Resources stated completion of the transaction with Peabody is progressing and a settlement is due in June 2021.
The acquisition from Peabody includes an upfront cash consideration of $1.25 million and a royalty agreement.
CAS has close to 20-years operational experience to provide auger mining services, which allows for safe access to coal reserves that are considered inaccessible.
The company has previously augered Mavis Downs and Millenium three times.
CAS manager director Bret Leisemann welcomed the new contract.
“We’re delighted to support the fast restart of Millennium Mine and to assist with deriving early value from this coal resource. We are proud to support Queensland’s newest producer in the metallurgical coal industry,” he said.
The price of the contract was not revealed.