September 23, 2014

Moreton Resources says the costs of washing and handling coal from a future mine at Coolabunia are half what the company expected, meaning it can now move on to developing a high level mine concept study for the proposal.

Moreton CEO Jason Elks advised the ASX today that it had received the results of its Coal Washability review.

These had been verified by independent consultant Dr Chris Clarkson.

“Dr Clarkson has over 35 years’ experience in the Australian coal industry,” Mr Elks said.

“Dr Clarkson has previously held roles as Superintendent Research & Development Laboratory for Utah Development Co., Associate Professor in Minerals Processing at the University of Queensland, Executive Technical Director for CCI Holdings (now Bureau Veritas) and currently acts as a specialist consultant for Sedgman Limited.”

The report indicates that with selective mining, about 50 per cent of the resource would produce coal with an ash level of 28 per cent.

Washing would increase this recovery rate to about 80 per cent.

Mr Elks said the outcomes from Dr Clarkson’s review “indicate that the order of magnitude estimations generated are likely to be on the conservative side even after allowance for coal loss and dilution”.

“This outcome is another positive step for consideration in advancing the company’s Kingaroy project,” Mr Elks said.

“What is stated above indicates that the costs for washing and handling the coal have been significantly reduced to half of that anticipated by the company.

“This will have a significant positive impact on the overall operating and supply costs for a thermal coal product meeting a 28 per cent or lower ash specification.

“Accordingly, given this positive outcome, the company will now proceed to review its high level mine concept study and seek to refine estimations and assumptions based upon this new information, which we hope will have an overall positive impact on the prospectively of the Kingaroy project.”

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