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17/11/2010 — Coal, Lignite and CSG/CBM
Bathurst wins the day over Galilee’s NZ coal mines
By Ross Louthean

The spurning of Bathurst Resources Ltd’s bid for the New Zealand coal mining and exploration assets of Galilee Energy lasted less than two weeks, with the Perth-based company this week acquiring the properties that had been destined by Galilee for an IPO.

The move for Bathurst (ASX: BTU) puts it straight into coal production through the two mines owned by Galilee on the South Island – Cascade in the Buller coalfield near Westport and Takitimu near Nightcaps in Southland.

Bathurst last week finalised acquisition of the large Buller project from Christchurch-based L&M Coal Holdings Ltd by taking over its subsidiary that held the permit that envelops part of Solid Energy’s big Stockton mine.

Bathurst is acquiring the Galilee subsidiary Eastern Resources Group Ltd for $A32.6 million and will reimburse Galilee about $A2.4 M ($NZ M) for the costs incurrred with the planned IPO. Takitimu is a thermal coal mine.

Eastern’s Cascade mine and nearby Whareatea West prospect on the Denniston Plageau (with JORC resources of 25.7 M are bear Bathurst’s Escarpment Block in the Buller project.

Bathurst managing director Hamish Bohannan said the acquisitions, coupled with the Buller project, will provide the company with “significant synergistic value”.

Takitimu and Cascade will provide Bathurst with combined annual production of about 200,000 tonnes per annum.

Bohannan said the acquisition increased the company’s total JORC resources in the Buller coalfields region by 55% to 72.8 Mt, up from the current resource of 47.1 Mt as announced by Bathurst early in September.

Whareatea West is adjacent to Bathurst’s Escarpment block, where mining is expected to begin in late 2011. The current mine blueprint will now be “greatly enhanced” by allowing Bathurst to mine through existing tenement boundaries and to extract coal that would otherwise be sterilised.

Coal extracted from Whareatea West will be processed through the company’s planned wash plant that is to be located adjacent to the Escarpment project.

The Cascade mine currently produces about 40,000 tpa with the majority of coal sold under contract to the local cement works operated by Holcim.

Takitimu has a current resource of 3.24 Mt of thermal coal and produced about 160,000t in 2009-10. The majority of the coal is sold under a long term contract to the Fonterra operated Clandeboye milk processing plant.

The coal seams identified at the Takitimu operations extend into the adjoining Eastern held Ohai Exploration Permit (EP 51260) which surrounds the existing mine. Recent drilling supports additional resources of sub-bituminous coal which are likely to extend the current mine life at Takitimu from under 2 years to potentially 10 years.

Eastern also owns a coal handling and distribution centre located at Timaru, and the Ohai (EP 51260) and Albury (PP 52484) exploration prospects.

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Bathurst’s Hamish Bohannan.
The Takitimu operation in Southland.