Australia’s New Horizon gears up for Utah coal mine start

Australia-based New Horizon Coal Ltd. said in a February investor presentation that its newly-acquired, undeveloped Kinney No. 2 underground coal mine in Utah is on track for development and targeted for first production in the second half of 2013.

Infrastructure for the mine is in place for export, with adjacent rail (on the Union Pacific railroad), power and utilities. Port options are to be negotiated by New Horizon with a number of feasible options. This is a superior thermal coal, with a calorific value ranging between 6,500 to 6,780 kcal/kg (as received basis) with estimated 7.0% to 9.5% ash and 0.5% to 0.9% sulfur, the company said.

An initial Joint Ore Reserves Committee (JORC)-compliant resource delineated by consultant Behre Dolbear stands at 26.1 million tonnes (with 92% in the measured and indicated categories), said the presentation. There is a substantial further resource upside on other parts of the Kinney lease and adjacent U.S. Bureau of Land Management land. The company is in the process of lodging a lease application with BLM that includes four additional lease parcels, called North, South, Broads Canyon and Clear Creek. Within the project area, the targeted Hiawatha seam ranges from 1.5 meters to 3.3 meters in thickness and dips an average of 3.5 degrees northeast.

Pre‐feasibility studies have commenced and are planned for completion in the second quarter of 2012. A bankable feasibility study is planned and top tier mining consultants will be awarded the study in the first quarter of 2012.

The company’s Managing Director is Mike Placha, the presentation shows. He was Senior Vice President with Montana coal miner Signal Peak Energy (2005‐2010), a former President of SedgmanCanada and spent 16 years at Cyprus Amax Coal.

The COO of the company is Greg Hunt, a veteran coal geologist who guided the Kinney No. 2 mine through the Utah coal permitting process for prior mine owner Carbon Resources LLC.

There is a domestic market for this coal with six coal-fired power plants, including three run by PacifiCorp, within a 260-kilometer radius of the project. A number of export alternatives exist, including exporting to Asia, Europe and South America. This coal also could be used as an attractive blending coal for lesser quality coal exporters in other regions, the presentation added.

About Barry Cassell 20414 Articles
Barry Cassell is Chief Analyst for GenerationHub covering coal and emission controls issues, projects and policy. He has covered the coal and power generation industry for more than 24 years, beginning in November 2011 at GenerationHub and prior to that as editor of SNL Energy’s Coal Report. He was formerly with Coal Outlook for 15 years as the publication’s editor and contributing writer, and prior to that he was editor of Coal & Synfuels Technology and associate editor of The Energy Report. He has a bachelor’s degree from Central Michigan University.