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The reserves were purely based on the Whynot and Bowfield seams in the western underground zone of the thermal and semi soft coking coal project, with 69Mt set as a probable marketable coal reserve.

There was also an update to the project’s resources, with the indicated category lifted by 18% to 394Mt.

While the project was once envisioned to house two longwalls producing a total of 10 million tonnes per annum, prefeasibility work since has centred on a single longwall operation targeting 6-8Mtpa for an average of 6.4Mtpa for at least two decades.

The proposed longwall panels are 300m wide with mining losses to be 3% of the seam to account for the coal left on the floor.

This project has a capital expenditure estimate of $A800-920 million and life of mine operating costs forecast to be $57/t free-on-board when excluding government royalties.

First production under this scenario was expected to be in late 2017 to early 2018.

Unlike the planning issues facing Anglo American’s Drayton South project to the immediate east, the Spur Hill project has no horse studs and the only small-scale vineyard in the permit is already owned by Malabar.

“This maiden reserves estimate confirms that the deposit supports a profitable underground coking coal project with low environmental impact,” Malabar chairman Wayne Seabrook said.

“As further field work and studies are undertaken, we will progressively convert more resources into reserves, so underpinning the project well beyond 20 years.”

Doyle is chief executive officer of Malabar.