Potential Duchess Paradise Project

Rey Resources is focused on advancing its proposed Duchess Paradise Project towards development, with a Definitive Feasibility Study completed for an up to 2.5 million tonne per annum (Mtpa) thermal coal operation over an initial 10 year mine life.

The Duchess Paradise Project is located on a remote pastoral station, 175km by road south east of Derby, and 60km by road from the nearby communities at Camballin, Looma and the pastoral station homestead. The conceptual development has a small footprint of under 20 km2 on semi-arid land that has been used for pastoral and exploration purposes for over 100 years, and is outside any key environmental or heritage protection zones.

The proposed Project comprises a mine, coal handling and preparation plant, related infrastructure and access road to the Great Northern Highway between Fitzroy Crossing and Derby. Thermal coal will be transported by truck to the existing Export Facility at the Port of Derby, where the product will be stored, loaded by barge and transferred to anchored ships for export.

The company plans to use a low-impact slot mining which will ensure lower impact to the environment than comparable mining operations using the traditional open-cut method. This innovative mining technique is less intrusive, and lends itself to progressive back-filling and rehabilitation without the need for an extensive void at the end of the mine life. Adoption of room-and-pillar underground mining of the deeper coal in the future would make use of much of the same surface infrastructure as the slot mining.

The project will unlock one of Western Australia’s highest grade coal deposits, adding to the State’s export capability and future energy security. This will provide substantial economic benefits for the region and State, and will enhance Australia’s reputation as a reliable exporter of energy.

Project Milestones and Status

The potential Duchess Paradise Project has reached the following project status as at January 2011:

• A Heritage Protection Agreement was signed with the Kimberley Land Council (KLC) on behalf of traditional owners in 2007
• Exploration drilling and resource definition commenced in 2008
• Positive Pre-Feasibility Study (PFS) completed January 2010
• PFS supports 2 million tonnes per annum (Mtpa) high-wall mining operation
• PFS indicates low capital costs and eight year mine life
• Key port and road infrastructure requirements in place
• Definitive Feasibility Study (DFS) underway
• Off-take discussions underway
• Well advanced environmental studies and community discussions
• Extensive heritage research completed in close relationship with traditional owners and KLC
• Project approvals process expected to start in 2011
• Production proposed to start at the end 2013, subject to required approvals