Cascade production well up

Coal production at Eastern Corporation’s Cascade mine, near Denniston, rose 62 per cent to 65,000 tonnes in the year ending June 30.

The Brisbane-based miner bought Cascade for $3.5 million from local mining company Cascade Mining Limited on June 30 last year.

Eastern’s annual report, released this week, said the company had managed to increase the mine’s annual production from historical levels of about 40,000 tonnes to 65,000 tonnes.

Eastern has already announced a $A1.79 million ($NZ2.06m) profit for the year ending June 30. It recorded a $A12 million loss last year.

The much-improved result came on the back of a cold South Island winter which lifted the company’s domestic coal sales from Cascade.

In the annual report, chief executive Mike O’Brien said it had been a landmark year for Eastern.

“A little over a year ago, the company was engaged solely in coal and gas exploration in Australia and New Zealand. Now, Eastern is producing coal from two mines, generating operating cash flow and building cash reserves with which to fund the next stages of several potential developments.”

Mr O’Brien said a drilling programme had been completed at Whareatea West, near Cascade, and analysis was currently underway. Coal quality and resource estimates would be available in the near future, he said.

The report said the company believed there was a potentially larger coal resource at Wharetea than at Cascade. It believed there were about 1.5mt of coal left at Cascade, but was hoping for up to 20mt reserves at Whareatea.

Meanwhile, the report also confirmed Eastern’s $NZ2.4m takeover last month of the Takitimu mine (formerly Straith mine) in Southland.

Takitimu, with an estimated coal reserve of 2.8m tonnes, would enable the company to better service Southland customers, the report said.

Coal from both Eastern’s mines will be trucked to the company’s newly purchased handling and distribution centre at Timaru. Some coal could be exported from Timaru, although Eastern has said its “full focus” is currently on the domestic market.

by Jamie Shaw. Westport News 20 October 2006