Sumitomo is taking its backing for the Hillalong coal project in the Bowen Basin to the next level, confirming it will proceed with Phase 2 of a joint venture agreement.
This follows a successful Phase 1 exploration program which resulted in a maiden JORC Resource of 43 million tonnes and confirmation that the Bowen Coking Coal project is able to produce a low-ash, high-quality coking coal.
The Japanese conglomerate now has the ability to earn an additional 10 per cent in the Hillalong project by providing a further $5 million for exploration.
Sumitomo already has interests in the Clermont, Rolleston and Oaky
Creek mines, as well as Glencore’s Hail Creek Mine which neighbours the Hillalong tenements and produces more than five million tonnes of coking coal annually.
“We’re pleased that Sumitomo shares our strong belief in the potential of the Hillalong Project, which has returned encouraging exploration results over the past year, reflected in the significant maiden JORC resource of 43 million tonnes,” Bowen Coking Coal managing director and chief executive officer Gerhard Redelinghuys said.
“The first part of our Phase 2 work program has now been approved by Sumitomo and will be conducted over a 12‐month period commencing in January 2021.”
This would consist of an extensive drilling program to maximise the resource coverage and would include a seismic survey, he said.