The South Galilee Coal Project (formerly Alpha Project) consists of EPC 1048, EPC 1049, EPC 1179 and EPC 1180 and an MLA which was applied for over portion of EPC 1049 in July 2011. It is currently held by a 50 - 50 joint venture between Alpha Coal Pty Ltd, which is a wholly owned subsidiary of Bandanna, and AMCI (Alpha) Pty Ltd (AMCI). This project is one which has now been declared a Project of State Significance by the Queensland Government. Details of the project can also be found on the South Galilee Project Website
Location and Infrastructure
The project is located immediately south and to the west of the township of Alpha, which is approximately 160 km to the west of Emerald approximately mid-way between Emerald and Blackall.
South Galilee Project Permit Map
The rail to Gladstone is located along the northern boundary of EPC 1049 and EPC 1180 and the area is well serviced by a major highway. However, this rail corridor is unlikely to provide any practical rail solution, major proponents in the Basin recognizing the need for a new 500 km heavy duty standard gauge rail corridor to be built connecting with Abbot Point export port, near Bowen on the Queensland coast.
Previous Exploration
Prior to the current Joint Venture there had been little exploration for coal within the South Galilee Project area, occurrences having been noted only in historical petroleum wells. Following the formation of the AMCI-Bandanna Joint Venture AMCI, as farminee, agreed to expend up to $25 million on exploration including Concept and Prefeasibility Studies.
Drilling data indicates the presence of up to five seams, of which the D1 and D2 seams are the principal targets. The coal is bituminous and would yield a thermal product. As at March 2011 a total of 162 open holes and 118 partly cored holes, totaling 34,280 m of drilling, had been completed.
Resource Estimate
On 8 February 2011 the Joint Venture provided a resource update to the market which included the following. Maiden Measured Resource of 166.6 Mt, Indicated Resources 206.3 Mt and total Resources of 1,178 Mt* (Refer to Table of Resources and Reserves and Compliance Statements). These resources pertain to the northern portion of EPC 1049 covering a strike length of 15 km, primarily in an area where previous Concept Study results indicated was most suitable for open cut development.
Reserve Estimate
On 31 January 2012 the Joint Venture provided to the market its maiden Reserve Statement based on the February 2011 Resource Statement. Whilst work in progress and estimated only for the open-cut component of the dual open-cut and underground mine development plan the total Reserve is 274.0 Mt; comprising 132.3 Mt of Proven and 141.7 Mt of Probable. Total Marketable Reserve is estimated at 217.7 Mt. These reserve figures relate to just the open cut portion identified to date and for the D1 and D2 seams. Shallower coal seams penetrated during drilling (the A and B seams) have been disgarded from reserve and resource estimations.
Coal Quality
On 4 March 2011 the Joint Venture provided to the market an expected product coal quality specification for a number of coal quality alternatives including a 5,600 kcal/kg gar and a 5,800 kcal/kg gar. With the exception of the D1U ply (which is not planned to be mined) all of the coal has raw ash content of 20% or less, with some 390 Mt at less than 12%.
Development
As announced on 8 July 2011 the Joint Venture applied for a mining lease (MLA 70453) covering the northern portion of EPC 1049 in order to progress its development plans for the South Galilee Coal Project. This MLA is part of a rigorous process involving an EIS which is currently in progress. A Prefeasibility Study completed in April 2011 indicated a potential mine life of some 33 years with an annual ROM production rate peaking at around 16 Mt. The initial mine development plan envisages 3 distinct stages; Stage 1, 5 Mtpa: an open-cut operation targeting the shallower portions of the lower ash content D1 and D2 seams. Stage 2, 10 Mtpa : addition of first longwall. Stage 3, 15 Mtpa : addition of a second longwall.
Both Hancock Prospecting and Waratah/China First have submitted EIS’ which propose standard gauge heavy duty rail connection with Abbot Point. The Queensland Government has indicated that whilst there may only be development approval for one of these projects, the successful proponent will need to provide for third party access.
As some of the coals will need to be washed, particularly those involving the A and B seams, extensively developed in tenements north of the South Galilee Project area, water will be a key issue. In this regard the Joint Venture has entered into an agreement for a feasibility study with Sun Water to provide water supply to the South Galilee Project area.