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Melanie and Chevy Ohl Sgt Rob Smith and Constable Paul Muller (L-R) Kaitlin Hodby, Leah Thorpe, Layne O'Brien, Brooke Hodby and Maddison Thorpe (L-R) Sebastion Rayfield, Vincent Rayfield, Trishelle Avu and Tayla Thorpe (L-R) Sharlani, Rhythm-Rayne, Eesiar and Khvalee'a. The Smythe boys csg The Hamilton family dragline Mitchell Brown and friends (L-R) Fern, Simon, Phoenix Morgan and River Levi csg (L-R) Neve Flint, Brooke Roberts Holly Hill and Isabelle Elms Aboutusgeneric_2 Sgt Rob Smith and Constable Paul Muller
Melanie and Chevy Ohl Sgt Rob Smith and Constable Paul Muller (L-R) Kaitlin Hodby, Leah Thorpe, Layne O'Brien, Brooke Hodby and Maddison Thorpe (L-R) Sebastion Rayfield, Vincent Rayfield, Trishelle Avu and Tayla Thorpe (L-R) Sharlani, Rhythm-Rayne, Eesiar and Khvalee'a. The Smythe boys csg The Hamilton family dragline Mitchell Brown and friends (L-R) Fern, Simon, Phoenix Morgan and River Levi csg (L-R) Neve Flint, Brooke Roberts Holly Hill and Isabelle Elms

Hail Creek JV ends
Wednesday 01 July 2015  

THE financial future of Australian Pacific Coal (APC) is looking even more fragile today, following a decision by Rio Tinto not to continue with its JV on the Hillalong tenement adjacent to Hail Creek mine west of Mackay.

In a short statement, Rio Tinto said it had decided not buy the tenement from APC

“After the completion of exploration work on Hillalong and subsequent review of results, RTX  [Rio Tinto] has decided not to exercise the option to acquire the tenement,” they said.

“Accordingly, we will let the agreement lapse.”

The decision by Rio Tinto is a damaging blow to APC, who at the end of April had just $300,000 in working capital with which to navigate the terrible conditions in the current mining cycle.

The Mt Hillalong 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 has remained hopeful they would ultimately take over the project.

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

“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.”

Following Rio’s announcement, APC chairman, Peter Ziegler, said they were looking at their remaining options.

“While we recognise that this is a significant announcement for the company, we draw our shareholders’ attention to the fact that APC holds a number of high quality coal exploration tenements and that your directors are actively engaged in realising value from all of the company’s assets.”

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.

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