Stanmore Resources has entered into a binding agreement with Anglo American and Exxaro, the participants of the Moranbah South joint venture (MBS JV), granting Stanmore the rights to explore, study, and apply for a future mining lease over a designated area on the MBS JV tenements.
This area, immediately adjacent to Stanmore’s Isaac South project, is expected to significantly enhance the economics of Isaac South by adding low-strip-ratio coal, thereby extending the life of operations beyond the currently mined Isaac Downs pits.
“This transaction paves the way for the development of our Isaac South project in a more competitive and lower-average-strip-ratio basis, as a natural capital efficient brownfield extension of our current Isaac Downs mine, prolonging the overall mine life at our Isaac Plains Complex,” Stanmore chief executive officer Marcelo Matos said.
The addition of the designated area is projected to contribute approximately 50 per cent of the total mineable resource of the enlarged Isaac South project.
The strip ratio is expected to start at just 4-5:1 run-of-mine, meaning the mine’s development will have a lower capital cost and time to first coal will be faster.
The designated area is also strategically located near Stanmore’s existing coal handling preparation plants, dragline, and associated infrastructure, further reducing development costs and timeframes.
The agreement entails an upfront payment of $US15 million, followed by a deferred consideration of $US20 million upon the first coal being mined or approximately 10 years after the grant of a mining lease. Additionally, a capped royalty of up to $US40 million is linked to certain coal price thresholds.
Stanmore plans to fast-track the project, with plans to submit all required documentation in 2025.
“We will now work closely and swiftly with State and Federal Government departments and regulators to progress the environmental impact studies and all associated work and secure all required regulatory approvals to submit an investment case for internal approval to start construction of the new pit and associated infrastructure,” Matos said.
The company aims to maintain operational continuity at its Isaac Plains Complex, potentially adding another 15 years of mining at the current rate of four million tonnes per annum.
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