"Bowen Coking Coal is picking up the exploration pace in the world’s premier coking coal location, Queensland’s Bowen Basin, as activity hots up in the area.
The company (ASX:BCB) has now begun the second phase of exploration at its wholly owned Cooroorah coking coal project after receiving positive results from a recent mining study.
It also comes at a time when US-based Coronado Coal is planning a $1 billion initial public offering – which if successful will be the biggest coal mining float since Yancoal Australia (ASX:YAL) made its debut in 2012.
Coronado, which owns the Curragh mine and is one of the biggest metallurgical coal producers outside of the major diversified miners, just happens to be BCB’s neighbour.
The same coal seams that run through the former Wesfamers-owned Curragh mine, which produces 8.5 million tonnes of metallurgical coal each year, also extend into BCB’s tenements.
The Bowen Basin, a 60,000 sq km area in central Queensland, hosts Australia’s biggest coal reserves and virtually all of the known mineable prime coking coal, according to the Bowen Basin Underground Geotechnical Society.
Coking coal is vital in steel production — and global crude steel production is at its highest levels since 2012, due largely to China’s focus on infrastructure and housing.
BCB’s landholding is also near Bounty Mining (ASX:B2Y), which is mining the same coal seams that BCB is targeting.
Bounty Mining is a hot topic in the news after it debuted on the ASX in June at a 23 per cent premium and has struck a new deal to provide coal washing and rail loadout services to Carabella Resources for the Bluff mine.
BCB’s Cooroorah project, which already hosts a 154 million tonne JORC resource, lies between Coronado’s Curragh mine and the Anglo, Marubeni and Sojitz-owned Jellinbah mine. Top quality results
The company recently completed a mining study that delivered coal quality results that were significantly better than earlier results.
The new results showed that BCB’s Cooroorah project has excellent coking coal properties indicating a potential 3.5 per cent ash, CSN 8-9 primary coking coal and a secondary 7500 kcal/kg high energy, low volatile pulverised coal injection (PCI) product.
PCI is commonly used in blast furnaces as a replacement for coke in the steelmaking industry, and trades at a premium to semi-soft coking coal.
“The recently completed mining scoping study helped us to understand the significant impact of the Mammoth seam discovery on the Cooroorah project,” CEO Gerhard Redelinghuys said.
“Not only did it prompt us to explore how far south the Mammoth seam extends, but also to increase our confidence in the Mammoth seam quality and washability to support future
project development options.”
The goal of the second phase of drilling in the North and Central area of the tenement is to connect the newly discovered Mammoth seam resource with the rest of the indicated resource in the Southern area.
JORC refers to the mining industry’s official code for reporting exploration results, mineral resources and ore reserves, managed by the Australasian Joint Ore Reserves Committee.
Mineral resources are categorised in order of increasing geological confidence as inferred, indicated or measured. By moving resources into the indicated category, it means a company has sufficient information on geology and grade continuity to support mine planning.
If the current exploration program is successful BCB expects it to lead to an upgraded resource.
The company is aiming to convert more of the inferred resources to the higher confidence indicated category.
BCB plans to be “drill-ready” within two weeks."
BCB Price at posting:
1.7¢ Sentiment: Buy Disclosure: Held
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