Australia-listed Jameson Resources has reaffirmed the reserve for its Crown Mountain hard coking coal project in Canada's British Columbia, following a feasibility update that reflects updated capital, operating, and market input assumptions. 

The update resulted in a 200% increase in the project's pre-tax net present value to $942-million.

Independent technical consultants Allnorth, Sedgman and Stantec reviewed the economic inputs from the July 2020 bankable feasibility study (BFS), factoring in cost inflation and revised coal price and exchange rate forecasts. 

Despite a 28% increase in pre-production capital to $394-million and a 15% rise in cash operating costs to $102.79/t (FOB Vancouver), the project economics improved significantly, driven by a stronger price outlook and earlier yield optimisation.

The reserve remains valid, according to a letter of assurance issued by the competent person following the review.

“The feasibility update has indicated significant increases to the project’s high-level economics,” said Jameson chair Nicole Hollows. “With the continued progress of the environmental assessment process, this update highlights the advanced position of the project compared with greenfield projects in Canada, Australia or other key producer locations.

“There has been more than $20-billion in steelmaking coal M&A in the last year highlighting that existing producers have limited options for organic growth. Crown Mountain’s position as the most advanced steelmaking coal project in Canada and its substantial underlying value is further enhanced by the feasibility update which demonstrates the project’s cost competitiveness compared to current and planned production. Continued progress of the regulatory process will enable the project to be developed to meet the identified shortfall in premium steelmaking coal supply in the medium and long term," Hollows added.

Jameson holds a 77.8% stake in the project through its Canadian subsidiary NWP Coal Canada, with ASX-listed Bathurst Resources holding the remaining 22.2%.

The project remains unchanged in terms of mine life (15 years), resource volume (57.5-million tonnes of run-of-mine), and processing yield (52.9%), but now carries a higher benchmark coal price of $225/t, up from $165/t previously.

Post-tax NPV has risen from $276-million in 2021 to $527-million in the latest update, with the internal rate of return increasing to 37%. After-tax net cashflow is estimated at $1.45-billion.

Jameson continues to advance the project through the Canadian environmental permitting process and has developed partnerships with key Indigenous Nations.