Beacon Hill Resources is speeding up its Phase II of the expansion of its Minas Moatize coal mine in Mozambique with the upgrade of the wash plant due to start next month (August).
It means the mine will operate as a profitable and cash flow positive operation from as early as 2013. It will triple the feed capacity at the mine to 1.8 million tonnes of run of mine coal. The total estimated cost of the upgrade of the wash plant targeted to be completed by the end of the year is USD 5 million to be paid for with the issue of EUR 3.4 million of unsecured convertible loan notes.
Mr Justin Lewis chairman of Beacon Hill said that "Completion of the Phase II expansion in 2012 should see the Minas Moatize Mine able to operate as a profitable and cash flow positive operation on an ongoing basis from the beginning of 2013 based solely upon a trucking transport solution and without the requirement for any further significant capital expenditure."
The existing plant was commissioned in 2011. It performs a single-stage wash at a feed rate of 120 tonnes per hour. Currently, the plant is not optimal for coking coal production at an economic and consistent yield.
The existing plant will continue to operate for the rest of the year, but the capacity will be impacted by the works. It anticipates that total coal production will be around 80,000 tonnes for 2012 of which 20,000 tonnes will be coking coal, with the rest thermal coal.
Reporting on activities for the quarter to June 30th 2012 the firm highlighted that mining had begun from the Upper Chipanga pit at the Minas Moatize mine. This was at a rate of around 32,000 tonnes ROM coal per month and Beacon plans to make its first shipment to Global Coke an offtake partner next month (August).
At the Arthur River magnesite project in Tasmania a scoping study was finished in May showing an NPV of AUD 42million based on 292,000 dry tonne per annum ROM operation. At the Changara coal project in Mozambique's Tete province the Phase I of a drilling programme of a planned 17 holes has begun.
Mr Lewis said that "In addition to the ongoing mining operation, Beacon Hill has focused on the expansion of the Minas Moatize Mine. The completion of the drilling programme and the current test work being undertaken will facilitate and progress the optimisation and the design of the Phase III CHPP and the overall pit design."
Source - Proactive Investors
(www.coalguru.com)
