Year-End Summary 2013
- December 20, 2013,12:14 am
It is our pleasure to be writing to you as we approach the end of what has been a busy 2013. It was a year which provided many challenges for development and large-scale companies during difficult global market conditions.
However, despite the challenges we have faced, Cuesta Coal has continued to make solid progress on the development of our flagship Moorlands Project. In 2014 the Company is intending to commence and complete the Bankable Feasibility Study for Moorlands.
The Moorlands Project – Ongoing Development and Exploration Program
The Moorlands Project comprises EPCs 775, 776 and 1738. The project has a 146.1Mt JORC resource and is located 14km west of the Blair Athol Coal Mine and rail access in the Western Bowen Basin.
In a significant boost for the Company this year, Cuesta secured an $8.4m Share Placement Agreement with Hanford Holdings Limited (a Hong-Kong based Investment Company with a focus on international Mining Investments) in November. The funds from the Hanford Placement will be used predominantly for the continued development of the Moorlands Project as we push towards a Definitive Feasibility Study (DFS) in Q1 2014.
The addition of Hanford Holdings to the share register of Cuesta provides an additional supportive major shareholder.
A very important milestone for the Company was the completion of the Moorlands Scoping Study in late November. The study confirmed robust economics for a 1.9Mtpa open cut mine for 30 years in the proposed Moorlands South Pit. Highlights of the findings are summarised below:
- Low FOB operating costs of A$63/product tonne (excl. royalties) for the South Pit driven by:
- Depth to first coal 30-40m
- 3.2:1 average LOM strip ratio
- Average 89% yield
- Development capital costs (incl. contingency) estimated at A$148m including rail spur and train load out facilities
- Close proximity to existing infrastructure within substantial operating coal mine region
The Company commenced exploration activities in late August and has completed approximately 9000m of drilling. Positively, this has identified further widespread intersections of the B4, B8 and B9 target seams which bodes well for an updated resource estimate.
Leading up to the Christmas break, our efforts are focused on finalising the site activities before activities resume again in early 2014. Upon completion of the remaining exploration work this year, the data will be compiled into the existing geological model and a new resource estimate will be produced and provided to the market.
Looking ahead – 2014 and beyond
Looking ahead to 2014, Cuesta will focus on the next stage of the development at Moorlands by commencing work on the DFS. The DFS is on track to start in Q1 2014, with first coal production scheduled for 2016.
Recently there has been a strengthening of the coal price which coincides with the northern hemisphere winter. The long term outlook for coal remains strong and Cuesta believes this will coincide with the development of the Moorlands Project.
We would like to take this opportunity to thank our shareholders for their continued support through this exciting transformation phase for the Company and we look forward to working with you through the next stage in 2014.
All the best for the holiday season and we look forward to updating you again in the New Year.
The Cuesta Coal Team