Wayne Penning, CEO Jason Elks, Brett Fletcher and David Arnott, from Moreton Resources, at a community update session held in Kingaroy in October

December 10, 2015

Moreton Resources could consider exporting coal from its proposed Coolabunia coal mine via rail.

CEO Jason Elks lodged a statement with the ASX late last month stating that it had commissioned an analysis of rail transport options by independent project advisers Ranbury.

Alternatives considered in the analysis included re-opening the Kingaroy branch line.

Portions of this rail corridor are currently under re-development by the South Burnett and Gympie regional councils as a recreational trail.

This branch line would link to the North Coast line and on to the ports of Bundaberg or Gladstone.

The Kingaroy-Theebine line was officially closed in 2009, with the announcement made quietly by the State Government on Christmas Eve. The rail tracks have since been removed, and infrastructure such as bridges demolished.

A second option would be building a new rail line south to connect to the Western Line, then via Jondaryan to Kingsthorpe, Acacia Ridge and Fisherman Islands in Brisbane.

“The company sees several viable options to rail coal from the South Burnett, provided operating costs can be contained,” Mr Elks said.

He said Moreton’s primary focus was to provide economical coal to domestic Queensland power generators “however we are also assessing the viability of export options”.

Mr Elks said Ranbury had identified several potentially viable rail options, although these would require further analysis and depend on the results of the formal Pre-Feasibility Study for the mine and capital costs.

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Moreton Resources has also notified the ASX recently about several other studies which are being considered as part of the Pre-Feasibility Study process.

Mr Elks said there was a potential to operate the coal mine with a strip ratio of 4:1 (ie four banked cubic metres of waste to one tonne of coal).

He said a 4:1 ratio or lower would be one of the coal mining industry’s lowest outcomes in Queensland and NSW

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Moreton Resources’ interests in the Kingaroy area … a Mineral Development Licence (MDL 385), an application for a Mineral Exploration Permit (EPM 25992), and Cockatoo Coal’s tenement (EPC 882)

Moreton Resources has also released an updated assessment of its total coal resources in the South Burnett following its purchase of EPC 882, the former Cockatoo Coal asset.

The JORC Coal Resource Update, lodged with the ASX on Wednesday, has increased its coal resource estimate from 221.2Mt  to 912Mt – consisting of 22.2Mt inferred, 712.6Mt indicated and 166.2Mt measured.

“(This) validates the last 15 months of hard work that went into securing EPC 882,” Mr Elks said.

“Based upon this latest JORC Coal Resource, the company has secured on EPC 882 an estimated 377.8Mt of coal which equates to a purchase price of $0.0008 per tonne.”

Mr Elks said the scale of the coal asset, its location, potential strip ratio and calorific values make the project “truly world class”.

He said Moreton Resources had significant confidence in the asset and would now move into technical presentations to interested parties  “to whom the company has been in talks in the last three months, ranging from potential off take, financing and also operating partners”.

“A primary focus of the company is to continue with its high level of community and stakeholder engagement,” Mr Elks said.

He said a “social licence” to operate was critical and “the co-existence of the South Burnett community as a whole, being landowners, business owners, broader community and government services”  were critical to the project.

Mr Elks said Moreton Resources was investigating the establishment of a Community Mine Development Committee to assist with the community consultation process.

“MRV Tarong Basin Coal Pty Ltd fully understands that without that overt support of the South Burnett community, this project will struggle to proceed. However, in saying that, the Managing Director and Board believe the support and backing of the South Burnett community is there.”

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