Exploration Permit (Coal) 1230 was granted on 10 September 2008. It initially consisted of 86 sub-blocks and after relinquishment of area in 2012 and 2013, it currently (at Dec 2013) comprises 31 sub-blocks. The tenement is located in Queensland’s Bowen Basin and covers a structural dome (the Comet Anticline) interpreted to host the coal measures of the Lower Permian German Creek, Fair Hill and Burngrove sequences.

EPC 1230 has a high potential for coal resources amenable to surface and underground mining similar to the adjacent Washpool Project (Aquila Resources “AQA”) and McKenzie River Project (Stanmore Coal “SMR”). The tenement is surrounded by the existing Ensham, Jellinbah East, Blackwater (BMA) and Curragh (‘WES”) operating coal mines in the Rangal Coal Measures that produce thermal and coking coal products. Bandanna Energy’s (“BND”) Springsure Creek Project is located some 25 kms to the west.

Exploration at EPC 1230 has focused on the shallow Fair Hill coal sequence in the southern area of the tenement. Previous drilling by Ingwe Australia Pty Ltd (1996) intersected coal seams within the Fair Hill Formation including hole references CR005 (9.89 metres from 53.5m) and CR007 (5.99 metres from 5.3m).

During 2011, a total of 60 holes were drilled by Acacia in the initial exploration programme which successfully intersected coal over a significant area in the southern portion of the tenement which identified:

• A multi-ply, banded coal seam ranging from 5 to 14 metres in thickness, present from surface to greater than 120 metres vertical depth; and
• A second coal seam (Triumph) was intersected some 25 metres stratigraphically below the Fair Hill seam.

During 2012, an extensive delineation drilling programme comprising 137 holes for a total of 5,001 metres targeting both seams was completed, which resulted in Maiden (20 Oct 2011) and Update (7 Dec 2012) JORC Resource Reports.

Interpretation of geological geophysical data and geological modelling indicates both coal horizons dip gently to the south-southwest at approximately 2-5 degrees and are tentatively correlated with known seams in the Fair Hill Formation.

A further 38 holes, totalling 1,605 metres, were drilled during the September 2013 drilling programme. The drill holes recovered additional Triumph and Fair Hill seam cores for further drop shatter testing, coal quality analysis, geochemical and geotechnical testing. The data used to update the geological model, and the JORC Resource Statement prior to mine design and release of a JORC Reserve Statement in 2014.

Figure 1 shows the locations of target areas of potential open cut pits.

The Fair Hill Seam.

The Fair Hill seam is a multiple banded sequence of claystone, carbonaceous mudstone and coal. The coal plies occur as bands up to 300mm thick within the 8 to 14 meter thick sequence. The economic coal occurs as bright bands of vitrinite within the coal plies. The waste rock is predominantly a light grey to white tuffaceous and hard claystone.

Conventional heavy medium coal processing (“wet washing”) of the Fair Hill seam’s full sequence would result in an overall product coal yield somewhere less than 5%, thereby deeming the seam uneconomical. The conventional alternative would be to selectively mine the coal plies and discard the claystone waste. However due to the multiple thin repetitions of coal, mudstone and claystone, selective mining is not practical, economical or feasible. Consequently, a non conventional approach is required to unlock the potential of this seam.

The Triumph Seam.

The Triumph Seam, formally referred to as the B Seam, lies approximately 25 metres below the Fair Hill Seam. The 2012 drilling programme identified areas where the Triumph Seam was greater than 2 metres thick at depths of less than 30m. The Triumph Seam is a more conventional coal seam than the Fair Hill seam, with fewer white tuffaceous claystone bands inter-banded with dull and bright coal plies. The Triumph Seam with a product yield in excess of 40%, yields a high-quality, low-ash, semi hard coking coal in addition to a high ash thermal by product.

The Fair Hill coal sequence, of which the Fair Hill and Triumph seams are part, has been historically regarded as non-economic because of the low yield and corresponding high processing costs.

Acacia is seeking to adopt an innovative combination of proven mining and processing techniques that have not been previously combined and employed on Australian coals. These techniques will significantly reduce the processing costs for such low yielding coals, and therefore unlock the economic value of both the Fair Hill and Triumph seams.

Acacia’s management team has extensive and broad experience in coal mining, handling and preparation, from project development, including design, through to operations. It is this experience, and the adoption of proven technology applied in innovative ways that will unlock the potential of the Fair Hill coal sequence at Comet Ridge.

Drop shatter testing of representative 100mm diameter bore cores by the Acacia team and laboratory results have provided a detailed understanding of the physical nature and behaviour of the components of the Fair Hill and Triumph seams. Gaining such a detailed insight of the breakage and size distribution characteristics of the seams identifies where the coal and rock fractions report in respect of their separation by size distribution. The results of this testing have confirmed that the Fair Hill Seam mining and in-pit separation concept is also appropriate for the mining and improved economics of the Triumph Seam.

Acacia has identified a number of techniques and equipment that can be employed as part of the mining process, including dry separation of waste (rock) from the coal seam by capitalising on the different breakage characteristics of rock and coal to effectively and efficiently maximise the removal of the rock at the mining face (in-pit) as an integral part of coal mining operations.

At Comet Ridge, Acacia Coal is determined to:

• Continue to evaluate and test suitable equipment as an integral part of the mining operations and in-pit process.
• Continue to progress the project to Bankable Feasibility Stage.
• Demonstrate the ability to efficiently mine the Fair Hill and Triumph seams and successfully deliver a concentrated ROM coal from pit to the Coal Processing Plant.
• Process the ROM coal in a conventional Coal Processing Plant.

An Infrastructure Development Agreement between Acacia Coal and Bandanna Energy allows Bandanna to construct and operate its Springsure Creek Project Rail Loading Facility on EPC 1230. This facility will connect directly to the adjacent Bauhinia branch line which is part of the Blackwater rail network.

Under the Agreement, Acacia is provided with a minimum 1 Mtpa of rail loading access capacity (and up to an additional 1Mtpa from spare capacity of the total 14Mtpa Facility). As a result, the Comet Ridge Project will have rail loading capability adjacent to the Coal Handling and Processing Plant, and therefore direct access to the coal export terminals at the Port of Gladstone for its coal products.

Click here to view a summary of the PFS outcome