The Dingo West Project consists of EPC 881. It is currently held by a joint venture between Dingo West Coal Pty Ltd, which is a wholly owned subsidiary of Bandanna, and a subsidiary of Macarthur Coal Limited (Macarthur). The Company currently holds a 100% interest in the project, but Macarthur has the right to earn up to a 70% interest in the project by funding all joint venture expenditure until certain activities are completed. On successful completion of these activities, Bandanna will hold a 30% interest in the joint venture.
Location and Infrastructure
The project area is located around and to the west of the township of Dingo, central Queensland. The area has excellent infrastructure, with a high capacity rail link, and the Capricorn Highway bisects the permit. It is closer to the RG Tanner and Barney Point coal terminals than any currently operating mine serviced by the Blackwater rail line.
Figure 2: Map - Location of EPC 881, Dingo West
Previous Exploration
The area has been explored by several companies over the last thirty years, including Mt Morgan, J.A.B.A.S Pty Ltd and New Hope Collieries. During May 2007, Bandanna completed eight holes, totalling 1406.63 metres of drilling including 55.71 metres of conventional coring. The holes were designed to obtain coal quality information about the extent and quality of the coal seams within the Rangal Coal Measures. Including this programme, a total of eighty six holes have been drilled within the permit.
Resource Estimate
In June 2008 the estimated Inferred Resource within EPC 881 totaled 91.1 Mt of low volatile thermal coal at a strip ratio of less than 20:1 of which 56.7 Mt is at a strip ratio of less than 12:1. Additional drilling funded by Macarthur as part of the joint venture obligations which is currently underway may allow the reported coal quality to be up-graded to PCI coal when additional coal quality information is available. The resource estimate refers solely to intersections of seams greater than 0.5 metres in thickness.
Coal Quality
There is only limited raw coal quality data available from the drilling results, although the data show some very favourable characteristics. Macarthur Coal are currently undertaking a drilling program which includes analysis of samples from cored bore holes. The results of this analysis will be announced when the program is complete.