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EPIC: COK
Market: ASX
52-week High/Low: A$0.02 / A$0.00
Sector: General Mining - Coal
Market Cap: A$134.07M

Cockatoo Coal (ASX:COK) is the most recent entrant into the ranks of Australia’s coal production companies.

Listed on the Australian Stock Exchange in 2005, Cockatoo exports PCI metallurgical and thermal coal from the Baralaba mine in the Bowen Basin, Queensland.

Baralaba produced a record 520,000+ tonnes of coal in calendar 2009 and the Company now plans a further 50% rise in output by 2011/12 to ~750,000 tpa. A further, much larger expansion to ~3Mtpa is slated for when new coal transport infrastructure comes online from 2013.

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Cockatoo Coal

www.cockatoocoal.com.au

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Cockatoo Coal Snapshot

Company

Cockatoo Coal Limited is an emerging PCI and thermal coal production company, with operations in the Bowen and Surat Basins of central Queensland, Australia.

Among Cockatoo Coal’s major assets, as at 31 March 2010, were:

  • the Baralaba PCI Coal Mine, which produced 523,000t of coal in 2009CY
  • Woori project – an advanced, feasibility study stage 3.0Mtpa Thermal coal project, in central Queensland
  • 760Mt of total JORC coal resources across the project portfolio
  • 4,300km2+ portfolio of coal exploration rights across the Bowen and Surat Basins
  • 5 major ‘downstream’ Asian coal buying concerns in strategic positions on the Cockatoo Coal share register
  • $26.1m cash at bank, with
  • nil bank debt.

Currently the company plans a ~50% growth in Baralaba’s total coal production profile to ~750,000tpa during the next 12-24 months.

 

 

1. Baralaba Coal Mine

Location

The Baralaba mine is located near the town of Baralaba in south eastern limb of the Bowen Basin, Queensland. The coal mined is from the Rangal coal measures, and the operation sits within a larger 550km2 area of Cockatoo Coal exploration projects.

Mine Production

Baralaba produced 98,948 tonnes of coal in the March 2010 quarter, a lower amount than in previous quarters due to significant rains in the local catchment area that required operations to shutdown for a considerable length of time during the period.

Operations subsequently resumed without incident.

  September 2009
Quarte
r
December 2009
Quarter

March 2010
Quarter

Nine Months ended
31 March 2010






ROM coal (tonnes)
144,166 156,145 98,948 399,259
Overburden (bcm)
1,218,078 1,287,417 687,575 3,193,070
         

Mine planning

Reflecting the significant growth in export coal demand forecast globally to occur during the next 10+ years, planning is being undertaken with a view to staged expansion of output from Baralaba mine and the Company’s nearby exploration grounds.

Currently approximately 20Mt of JORC coal resources have been defined immediately North along strike from the existing Baralaba open pit, with significant further exploration and project development efforts to continue through 2010/11.

The company currently anticipates increasing production from Baralaba to ~750,000tpa by FY2011/12.

 

2. Bowen Basin Projects

Cockatoo Coal’s Bowen Basin projects extend from the Wonbindi project in the south to the Dingo project in the north, across approximately 92 kilometres of strike length, in an area located approximately 180km west of Gladstone, in central Queensland. Permian age Rangal Coal Measures sub-crop throughout the project package, offering 550km2 of contiguous target areas.

Baralaba Mine/Baralaba North

The Company currently has 4 drilling rigs at work in its Bowen Basin area of operations, advancing the company’s understanding of the geology, coal quality and further development potential of the Baralaba mine and surrounding exploration areas. 

As at 31 March 2010, the results of the recent drilling program at the Baralaba North project were being integrated with the Baralaba mine and Baralaba North geological models, and are to be incorporated into the Baralaba North resource model. Once completed, this will enable conceptual mine planning over seven kilometres of strike length.

Bowen Basin project areas.

Resources in the Company's Bowen Basin projects are summarised as follows:

Project Tenement JORC Status Estimated
Tonnes (Mt)
Depth of
Resource
Strip Ratio Area of Resource (Ha)
 Baralaba North  MDLA 416 Indicated 15.6 175 metres  8.8:1 108.8
 Baralaba Mine  ML 5605 Indicated 1.8* RL-15 8.2:1 44.1
Baralaba Mine MLA 80157 Inferred 1.7 RL-15 7.1:1 16.8
Baralaba Mine  MDL 184 Inferred 2.8 RL-15 9.2:1 35.1
Wonbindi  MDL 352/EPC 1047 Inferred 43.6 175 metres 11.8:1 373.6
Total of all Resource Categories 65.5 Mt

* As at September 2009 and reduced by subsequent production. 

3Mtpa Bowen Basin target longer term

A concept target output of 2.5-3.0Mtpa ROM production from a combined multi-pit south Bowen Basin operation will be a focus for Cockatoo Coal over the coming 3-5 years.

Expanded resource definition and the availability of new coal transport infrastructure capacity are just 2 of a number of key requirements that will need to be successfully met in order to achieve that target outcome. 

Baralaba Mine (ML 5605) and Baralaba North (EPC 1047) drill hole locations.

Dingo Project

The Dingo project is located at the northern extent of the Company's Bowen Basin projects. Coal seams intersected in the Dingo project continue to demonstrate common geological and geophysical signatures to the mined Rangal Coal Measure seams at the Baralaba mine, where production has demonstrated that the seams have PCI and thermal coal properties.

The Company is currently using 4 open hole drilling rigs and 1 large diameter core rig to systematically advance the geological understanding in the Dingo project. Core drilling of drill hole DG0077CH is underway, with successfully recovered coal samples to be dispatched shortly for detailed raw coal and washability analysis. The analytical results are expected to confirm similar PCI and thermal coal qualities to those seen in Baralaba mine (ML 5605), Baralaba North (MDLA 416) and Wonbindi (MDL 352).

The uppermost Burngrove Formation coal seams (Kaloola Beds), which occur directly beneath the Rangal Coal Measures, are also being assessed for raw and washed coal properties. The Kaloola Beds' equivalents are known to have coking coal properties elsewhere in the Bowen Basin.

The Pearl Creek target has been the main area of focus since the last update. Drilling results are currently being incorporated in the 3D model and are demonstrating the continuity of the Rangal Coal Measures between Pearl Creek and Giles Creek, to the north.

 

3. Surat Basin Projects

Cockatoo Coal currently holds 100% interests in more than 3,800km2 of coal projects in the Surat Basin region of South Eastern Queensland, inclusive of the Kingaroy project. (Illustrated on the map below.)

Surat Basin Projects

Woori project

Of these, the Woori project (MDL 187) is the most advanced, with EIS work underway as part of feasibility studies for a 3.0-3.5Mtpa thermal coal operation.

This project is being developed with a view to commencing production, to coincide with the opening of planned new rail and port infrastructure slated for 2013/14.

In addition, significantly increased JORC resources at the Tin Hut Creek (EPC 1134/813) and Bottle Tree projects (EPC 813) announced recently – both within 20km of Woori - point to the potential for Cockatoo to develop a larger ~6Mtpa+ multi-pit operation in the area, when sufficient infrastructure capacity is available.

In total, 694.5Mt of JORC thermal coal resources has currently been delineated across the Company’s Surat Basin projects, comprised from Juandah and Taroom Coal Measures of the Walloon Sub-Group, both of which sub-crop in the area.

A full breakdown of Cockatoo’s current Surat Basin JORC project resources follows:

Project Tenement JORC Status Estimated
Tonnes (Mt)
Depth of
resource
Strip Ratio
Woori MDL 187 (MLAs 50247/50248) Measured 84.3 110 5
Davies Road EPC 1041/813 Inferred 75.6 <150 9
Krugers EPCs 796/1041 Inferred 104.7 <150 10
Bottle Tree EPC 813 (MDLA 433) Inferred 32.5 <150 8
Tin Hut Creek EPC 1134/813 (MDLA 430) Inferred 118.6 <150 7
Total of all Resource Categories 415.7 Mt
Kingaroy EPC 882 Measured 35.5 <150 <10
Kingaroy EPC 882 Indicated 87.4 <150 <10
Kingaroy EPC 882 Inferred 85.4 <150 <10
Kingaroy EPC 882 Indicated 40.9 150-300 <10
Kingaroy EPC 882 Inferred 29.6 150-300 <10
Total of all Resource Categories 278.8 Mt
Total Surat Basin and Kingaroy Project Resources 694.5 Mt

Board of Directors

Norman Alfred Seckold, Chairman

Director since 28 January 2005

Norman Seckold graduated with a Bachelor of Economics degree from the University of Sydney in 1970. He has spent more than 20 years in the full time management of natural resource companies, both in Australia and overseas. Mr Seckold has been the Chairman of a number of publicly listed companies including Moruya Gold Mines (1983) NL, which acquired the Golden Reward heap leach gold deposit in South Dakota, USA, Pangea Resources Limited, which acquired and developed the Pauper's Dream gold mine in Montana, USA, Timberline Minerals, Inc. which acquired and completed a feasibility study for the development of the MacArthur copper deposit in Nevada, USA, Perseverance Corporation Limited, which discovered and developed the Nagambie gold mine in Victoria, Valdora Minerals NL, which developed the Rustler's Roost gold mine in the Northern Territory and the Ballarat East Gold Mine in Victoria, Viking Gold Corporation, which discovered a high grade gold deposit in northern Sweden and Mogul Mining NL, which drilled out the Magistral and Ocampo gold deposits in Mexico. Mr Seckold is currently Chairman of Australian public listed companies Bolnisi Gold NL, Kings Minerals NL and Planet Gas Limited and Canadian public listed company Palmarejo Gold Corporation. Bolnisi Gold NL, through its controlled entity Palmarejo Gold Corporation, has discovered a multi million ounce resource and is nearing development of its Palmarejo gold-silver project in Mexico. Bolnisi Gold NL is also exploring two other Mexican gold-silver projects and operates a heap leach gold project in ex-Soviet Georgia. Kings Minerals NL is exploring for precious and base metals in Mexico and Planet Gas Limited is a coalbed methane exploration and development and production company operating in Australia and the USA.

Mark Hamish Lochtenberg, Managing Director

Director since 28 January 2005

Mark Lochtenberg graduated with a Bachelor of Law (Hons) degree from Liverpool University, U.K. and has been actively involved in the coal industry for 20 years. Mr Lochtenberg was the co-head of Glencore International AG’s world wide coal division following his heading up of the coal trading desk of Glencore's Australian coal trading operations. During that time, he was actively involved in purchasing, managing and aggregating the coal project portfolio which became Xstrata Coal. Prior to this Mr Lochtenberg had established a coal 'swaps' market for Bain Refco (Deutsche Bank) after having served as coal marketing manager for Peko Wallsend Limited.

Peter James Nightingale, Director, Chief Financial Officer and Company Secretary

Director since 28 January 2005

Peter Nightingale graduated with a Bachelor of Economics degree from the University of Sydney and is a member of the Institute of Chartered Accountants in Australia. He has worked as a chartered accountant in both Australia and the USA. Mr Nightingale has, for the past 17 years, been a director or company secretary of a number of private and publicly listed companies in Australia, the USA and Europe including Pangea Resources Limited, Timberline Minerals Inc., Perseverance Corporation Limited, Valdora Minerals NL, Bolnisi Gold NL, Biotron Limited, ETT Limited and IMD Group Limited. Mr. Nightingale has been responsible for the financial control, administration, secretarial and in-house legal functions of these companies. Peter is currently a director and CFO of Bolnisi Gold NL and Planet Gas Limited.

John Gillis Broinowski, Non-executive Director

Director since 25 July 2005

Gillis Broinowski is a Fellow of the Australian Institute of Company Directors and is currently a director of the NSW Division of the Australian Institute of Company Directors. He is also currently a director, and former President, of Australian Business Limited and the Foundation for National Parks and Wildlife. Mr Broinowski has had in excess of 25 year's experience in the resources industry and is a former director of Peko Wallsend Operations Limited, Newcastle Wallsend Coal Co. Limited, Robe River Limited and former executive Chairman of Simsmetal Limited.

Lindsay Ross Flint, Non-executive Director

Director since 25 July 2005

Lindsay Flint is a graduate of the University of Queensland, completing a Bachelor of Engineering (Chemical) in 1967 and a PhD in 1971. He began his career in engineering research in the field of mineral processing and subsequently joined the coal industry with technical and then marketing roles. For more than 20 years, Dr Flint has carried various portfolios of responsibilities in Shell's international coal business working in Australia and the UK. These provided a broad exposure to coal sourcing and transportation from Australia, South Africa, China, Canada and the Americas and to markets in Asia, Europe, the Middle East and Latin America. As General Manager Marketing, he was responsible for all of Shell Coal's global sales and distribution until Shell divested its coal interests to Anglo American in 2000. Dr Flint continued with Anglo Coal Australia as General Manager Marketing for the following two years and has since maintained an active involvement in international coal, working with a major solid fuels trader, SSM Coal B.V.

Robert Ainslie Yeates, Non-executive Director

Director since 25 July 2005

Rob Yeates is a graduate of the University of NSW, completing a Bachelor of Engineering (Honours 1) in 1971 and a PhD in 1977 and then an MBA in 1986 from Newcastle University. He began his career with Peko Wallsend working in a variety of roles including mining engineering, project management, general mine management and marketing. He became General Manager Marketing for Oakbridge Pty Limited in 1989 following a merger with the Peko Wallsend coal businesses and went on to become Managing Director of Oakbridge, which was the largest coal mining company in NSW at that time, operating the Bulga Open Cut, South Bulga, Ellalong, Gretley, Baal Bone and Clarence coal mines. Dr Yeates has gained operating, business development and infrastructure experience as a director of Port Waratah Coal Services (Newcastle Port), Port Kembla Coal Terminal, Great Northern Mining Corporation NL and Cyprus Australia Coal and for the past 8 years has been principal of his own mine management consultancy, providing a full range of technical, management and strategic planning services to the mining industry. Rob Yeates and Associates Pty Ltd has entered into a consultancy agreement with the Company, which may be terminated with one month's written notice, to provide consultancy services to the Company as required from time to time by the Company. These services will be carried out by, amongst others, Robert Yeates.

Paul G. Chappell, Non-executive Independent Director

Director since 19 December 2005

Paul Chappell has had many years experience in the coal industry and in trading international commodities. He has particularly focused on solid fuels and has extensive experience in Asian, Latin American and European coal markets.Mr Chappell is a graduate of the University, completing a Bachelor of Commerce in 1982 and is a Fellow of the Australian Society of Certified Practising Accountants. He began his career working in a financial capacity for a coal service company in Australia but soon progressed to trading by taking up the post of Country Manager, Brazil for three years for an international company trading raw materials.He joined Hansen Coal (which was subsequently absorbed into SSM Coal B.V.) in 1991 and spent 11 years with SSM in Sydney. In 2002, he transferred to SSM's head office in The Netherlands to take up his current responsibilities as Director Commercial Operations Asia for SSM Coal B.V. in Rotterdam.

Hak Hee Lee - Independent, Non-executive Director

Director since 30 November 2006.

Hak Hee Lee is a director of SK Australia Pty Limited, a subsidiary of SK Corporation, the largest energy company in Korea with major business areas being petroleum refining, petrochemical and coal. Mr Lee has spent 21 years in the energy industry in new business development and overseas investment positions with a focus on coal.

Sun Moon Woo - Independent, Non-executive Director

Director since 25 September 2008.

Sun Moon, Woo is a graduate of Seoul National University in Korea, completing a Bachelor of Engineering (Mining) in 1980 and a Master course in 1982. He joined POSCO in 1983, since then has worked at Raw Material Purchasing Division and Investment Division for 25 years. During those careers, he accumulated a profound knowledge about natural and resources industry and conducted various investment projects in Iron Ore and Coal mines all over the world including Australia and Brazil. Currently he is working as a Managing Director in POSCO Australia Pty Ltd which is 100% subsidiary of POSCO.

Scott Thompson - Director

Director since 27 November 2009

Mr Thompson is a Director of Harum Energy Australia Pty Limited and has 18 years of coal industry experience. Prior to joining the Tanito Coal Group in 2003, he worked with various international mining organizations including Anglo American and PT Adaro Indonesia. Mr Thompson holds B.Eng (Hons) in Mining Engineering and an MBA from the University of Cape Town. He is Professionally Chartered and a member of the Australian Institute of Mining and Metallurgy.

Joo-Ok Chang - Director

Director since 3 March 2010

Mr Chang is a Vice President of Korea Electric Power Corporation ('KEPCO') and is in charge of all of KEPCO's business regarding energy resources development. In 1984, Mr Chang joined KEPCO and has since been a member of the power and energy resources industry. He has 18 years' experience in the power generation fuel field, including petroleum, natural gas, fuel shipping and, especially, coal. Mr Chang earned an MBA degree from Helsinki School of Economics in 2003 and an LL.M degree from Indiana University Bloomington in 2006.

Top 20 shareholders

Below is a list of the Top 20 shareholders as at 2 February 2010

  Top 20 shareholders as at 2 February 2010 Fully Paid Ordinary
Shares
 %
1 POSCO AUSTRALIA PTY LTD 88,747,350 14.74
2 SK AUSTRALIA PTY LIMITED 55,410,765 9.20
3 HARUM ENERGY AUSTRALIA PTY LIMITED 41,666,667 6.92
4 KORES AUSTRALIA PTY LTD 41,381,423 6.87
5 RIGI INVESTMENTS PTY LTD 37,545,457 6.23
6 KOREA EAST-WEST POWER CO. LTD 29,881,423 4.96
7 HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED 20,776,499 3.45
8 OXBOW COAL BV PTY LTD 20,045,454 3.33
9 KEPCO AUSTRALIA PTY LTD 20,000,000 3.32
10 PERMGOLD PTY LTD 16,250,001 2.70
11 ANZ NOMINEES LIMITED 15,777,337 2.62
12 ROSIGNOL PTY LTD 13,045,455 2.17
13 J P MORGAN NOMINEES AUSTRALIA LIMITED 8,352,995 1.39
14 NATIONAL NOMINEES LIMITED 7,175,968 1.19
15 CITICORP NOMINEES PTY LTD 5,675,145 0.94
16 WALKER GROUP HOLDINGS PTY LIMITED 4,750,000 0.79
17 COGENT NOMINEES PTY LIMITED 3,669,114 0.61
18 PERMGOLD PTY LTD 3,545,454 0.59
19 BIGA NOMINEES PTY LTD 3,331,694 0.55
20 FORBAR CUSTODIANS LIMITED 2,740,405 0.46
   Totals: Top 20 holders of ALL CLASSES OF F/P ORD SHARES  439,768,606  73.02

Total Remaining Holders Balance
162,488,774
26.98

 

Principal and Registered Office

Level 2, 66 Hunter Street
Sydney NSW 2000 Australia
Phone: +61-2 9300 3333
Fax: +61-2 9221 6333
Email: info@cockatoocoal.com.au
Website: www.cockatoocoal.com.au

Auditors

KPMG
Level 30, Central Plaza One
345 Queen Street
Brisbane QLD 4000 Australia

Share Registry

Computershare Investor Services Pty Limited
GPO Box 523
Brisbane QLD 4001 Australia

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