Paringa Resources Ltd has finalised the CAPEX estimate for the construction and development of its Buck Creek No.2 mine.

Paringa’s proposed 1.8 million tpy No.2 mine is located immediately south of the company’s proposed 3.8 million tpy No.1 mine, both located within the Buck Creek Mine Complex.

The final CAPEX estimate, based on pricing provided by vendors and contractors, encompasses all major capital items, including site development, electrical substation, ‘box-cut’ access to the coal seam, surface facilities, coal preparation plant, materials handling and the Green River barge load-out facility.

The previous CAPEX estimate was US$44 million. This has been reduced by US$5 million due to continued reductions in the costs of labour, materials, and supplies as well as the optimisation of the facility’s design. The new estimate comes in at US$39 million.

Paringa indicated that the reduction in CAPEX is also an indication of the availability of highly experienced coal industry contractors and the competition among contractors to win mine development work in the Illinois Basin. The final CAPEX estimate will be incorporated into the bankable feasibility study (BFS), which is due during the September quarter of 2016.

Paringa’s President and Chief Executive Officer, David Gay, said: “This is an outstanding outcome for Paringa and the result of long and hard work from our US management team. We are looking forward to continuing discussions with potential financiers this year and have received exceptional feedback since announcing our revised cornerstone coal sales agreement with LG&E and KU.”

Edited from press release by Harleigh Hobbs