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(L-R) Fern, Simon, Phoenix Morgan and River Levi (L-R) Sharlani, Rhythm-Rayne, Eesiar and Khvalee'a. Sgt Rob Smith and Constable Paul Muller Construction Mitchell Brown and friends mining Sgt Rob Smith and Constable Paul Muller (L-R) Kaitlin Hodby, Leah Thorpe, Layne O'Brien, Brooke Hodby and Maddison Thorpe Aboutusgeneric_2 (L-R) Neve Flint, Brooke Roberts Holly Hill and Isabelle Elms csg fifo Aboutusgeneric_1 Port The Smythe boys
(L-R) Fern, Simon, Phoenix Morgan and River Levi (L-R) Sharlani, Rhythm-Rayne, Eesiar and Khvalee'a. Sgt Rob Smith and Constable Paul Muller Construction Mitchell Brown and friends mining Sgt Rob Smith and Constable Paul Muller (L-R) Kaitlin Hodby, Leah Thorpe, Layne O'Brien, Brooke Hodby and Maddison Thorpe Aboutusgeneric_2 (L-R) Neve Flint, Brooke Roberts Holly Hill and Isabelle Elms csg fifo Aboutusgeneric_1

APC hoping for Rio
Wednesday 08 October 2014  

COAL explorer Australian Pacific Coal is focussing on its flagship exploration tenements and a joint venture with Rio Tinto near Hail Creek mine as it looks to navigate the difficult waters in the coal sector at the moment.

In a note to shareholders this week, APC said the deadline for Rio Tinto to make a decision about whether it will take over the Mt Hillalong tenements near Glenden is less than 12 months away.

The JV tenements are located about six kilometres from Glenden and just under 20 kilometers from Rio Tinto’s existing Hail Creek mine.

Rio began drilling at the Mt Hillalong site just over 12 months ago, and APC remains hopeful they will take over the project.

“Our main joint venture is with Rio Tinto,”  CEO Paul Byrne said.

“It is in its second year, and time is ticking for Rio Tinto to exercise its option to proceed past the first option period which expires on the 23rd August 2015 - so less than one year away.

“If Rio exercises its option to proceed, this will mean a large cash injection into APC and

a lot of optionality available to our company.

“We have the option to either retain a carried equity of 25 per cent in a joint venture with Rio Tinto and reap the rewards into the future, or we have the ability to completely sell out our interest in this project.

“These terms form part of the agreement that we have in place with Rio Tinto and signed by both parties.”

Like so many other small explorers dependent on investors to fund their operations, APC is treading carefully with the expensive task of drilling its exploration tenements.

Obviously the more they drill, the more they know about their tenements and the more value the tenements could be when coal prices improve.

According to APC, its flagship project is its Cooroorah tenement between Curragh and Jellinbah mines near Blackwater.

That project has advanced to the mineral development licence stage and has a deposit of around 125 million tonnes of metallurgical and thermal coal. About 70 million tonnes has been rated as “indicated” under the JORC code for reporting on mineral deposits.

However, the company is also optimistic about the potential of its Clermont South project.

“Our possibly most valuable 100 per cent owned project, Clermont South, abuts the 12 mtpa

Glencore mine [at Clermont],” APC CEO Paul Byrne said.

“This is expected to be drilled within the next month, targeting the coal measures associated with the Wolfang Basin.

“This is the same coal produced from Glencore’s Clermont mine where the main coal seam is up to 40 metres thick.

“Yes, your eyes do not deceive you, up to 40 metres thick!

“If we are successful in discovering an economic coal resource in this part of the basin, we will be able to produce a premium quality, direct shipping, thermal coal.”


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