Rockwood is located north east of the township of Dysart adjacent to the Fitzroy Development Road. The Oaky Creek Rail Line of the Goonyella Rail System is approximately 55km north west of the tenement, with a total distance of approximately 200km by rail to the Dalrymple Bay Coal Terminal. Macarthur Coal’s resource area Wilunga and planned mining project at Codrilla are located west and north of the tenement area respectively.
A total JORC resource of 337.3Mt was announced on 1 March 2012, comprising 44.5Mt Indicated and 292.8Mt Inferred.
Apart from being the maiden JORC resource for the area this represents the first JORC resource discovery in the Moranbah coal measures located in this eastern area of the Bowen Basin, potentially opening up a new coal province.
Endocoal released confirmation that the coal deposit recently discovered at Rockwood will be suitable for use in PCI applications. Core Samples from the Rockwood drilling were first analysed at Prelab Testing Services' Rockhampton Coal laboratory.
Gallagher Consulting, a Brisbane-based coal technology consulting group, then determined whether a suitable quality and commercial PCI coal product could be delivered.
Coal Quality Outcomes
The average washed quality for Rockwood, for samples tested to date to determine PCI properties comprises:
Rockwood coal is expected to be classed as anthracite. As such, it is expected to find a place in the PCI market. The final price available for a Rockwood PCI product will be adjusted based on actual variations in specific quality factors from those of recognised benchmark products and the corresponding prices obtained in the marketplace.
Internationally, the supply of anthracite from traditional sources is being limited by increasing domestic demand (e.g. Vietnam), whilst in other cases, some producers are having difficulty meeting quality requirements, or are otherwise dealing with higher freight costs to access growing Asian markets. Also, it is expected the low volatile Rockwood PCI product will have a higher calculated coke replacement ratio than that for high volatile PCI coals. These situations will provide opportunities for Endocoal as various options are assessed for the development of the Rockwood coal deposit.
Scope also exists to produce a lower ash, better quality Rockwood PCI coal product (compared to that shown above from laboratory tests) through the selection of specific seams, coupled with appropriate washing strategies and coal blending techniques. This will optimise the mining and yield outcomes for the overall deposit. Other coal mined can then be sold into the anthracite market as a high energy product.
At Rockwood the drilling program will focus on exploring further to the south-east along anticline structures already
identified, as well as to more closely drill in those areas likely to be prospective for the siting of a mine operation.
It is anticipated that a further update for JORC Resource at Rockwood will be available during the June/July 2012
Separately, the Company has engaged with two potential port development projects to be located at Dudgeon Point, near Mackay. The Company has lodged the necessary documentation required to support an application for 4Mtpa at each of the Brookfield and Adarni port development projects now under consideration. Rockwood and the nearby Nebo tenement have been nominated as the proposed coal sources respectively.
Conceptual Mine Planning Study to commence during Q2 2012, based on 3D geology structure model and coal quality model development from 2010/2011 drilling programs:
> Evaluate potential for open cut mining and consider alternative mining methods
> Identify infrastructure opportunities, including access to water supplies to support Rockwood development.
Port Infrastructure and Transport Logistics
The Northern Bowin Basin coal export ports:
> Previously expressed interest as a 'Preferred Capacity Seeker' with Abbot Point port expansion process; and
> Documents lodged with both Dudgeon Point Project Management and Adani port development projects confirming interest in acquiring port allocation at Dedgeon Point.