Analysis of Vickery coal quality indicates that, if all ROM coal is washed, saleable coal yield would be more than 80% consisting of predominantly low ash, low sulphur, low phosphorus semi-soft coking and PCI coal, along with a component of low ash, low sulphur, high energy thermal coal. The base plan, however, is currently 55% semi-soft coking and PCI coal and 45% thermal coal.
This saleable coal yield can be increased significantly through by-passing a proportion of low ash ROM coal, as is currently done with Whitehaven's Tarrawonga coal. This will provide the Vickery project with a high degree of flexibility in producing either metallurgical or premium thermal coal, depending on market conditions.
To date, open-cut Resources of 460Mt have been defined in the combined Vickery area (Vickery, Merton, Bluevale and Canyon Extended). Current mine planning has defined an open-cut Recoverable Reserve of approximately 139Mt. The current work program at Vickery is focused on further defining and extending Reserves to support the mine development plan.
Work is well advanced to define an open-cut mine plan for the Vickery project. Whitehaven expects this work to produce an open-cut mine plan for Vickery of approximately 4.5Mtpa ROM for at least 25 years with a stripping ratio of approximately 10:1. However, at this stage, a DFS has not been completed to enable a capital expenditure budget for Vickery to be established.
Whitehaven currently plans to lodge an application for Project Approval for Vickery open-cut in the first half of calendar 2012, with the aim of obtaining approval and being in a position to commence mine production in the second half of calendar year 2013.
Whitehaven intends to fund the development of the Vickery project using cash reserves, free cashflow generated from its existing mining operations and debt facilities.