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Stanmore Coal plans to restart mining at the Millennium and Mavis Downs mine complex within months after reaching a deal to buy the site from Peabody Energy Australia.

Stanmore, in joint venture with M Resources, has executed agreements to acquire the assets for an upfront payment of $1.25 million plus royalties.

It said the restart was expected to create 150 – 200 jobs, through the investment in underground expansions and completion of rehabilitation obligations.

Mining is planned to recommence from July 2021, with planned production ramping up to 1Mtpa, subject to rail and port capacity being available.

Stanmore – which already operates the Isaac Plains coal complex near Moranbah – said the Millennium and Mavis Downs mine represented a low-capital and quick-to-market investment opportunity in a high-quality coking coal asset, supported by access to existing critical infrastructure.

Coal washing would be undertaken at the Red Mountain Infrastructure coal handling and preparation plant (CHPP) via a fully executed toll washing and train loading agreement, Stanmore said.

The Millennium coal mine is located adjacent to Stanmore’s Isaac Downs project and is currently in care and maintenance.

Stanmore said the acquisition provided synergies between its existing assets and the Millennium assets.

The project has JORC Resources of 37 million tonnes, with 13Mt Measured, 17Mt Indicated and 7Mt Inferred.

A coal reserve for the open-cut and auger operation planned has been estimated at 2 million tonnes. Coal reserves for the underground operations are estimated to be 5.43 million tonnes ROM (4.56 million tonnes marketable).

The joint venture will assume rehabilitation obligations estimated at $25.7 million, with Peabody reimbursing $12.5 million of incurred rehabilitation costs over a two-year period.

Completion of the acquisition is subject to satisfaction of conditions precedent.

Stanmore in plans to restart mothballed Peabody mine