How Clara’s Ashford Upgrade Sets Stage for Coking Coal Comeback

Resource Upgrade Signals Growing Confidence

Clara Resources Australia Ltd (ASX, C7A) has announced a significant milestone for its Ashford coking coal project in northern New South Wales, upgrading 2.5 million tonnes of coal resources to the JORC Measured category. This upgrade, while not substantially increasing the total resource tonnage, marks a meaningful enhancement in geological confidence and resource certainty compared to the previous 2017 assessment.

The Ashford project, located about 65 kilometres north of Inverell, has a long mining history dating back to the late 19th century, with open cut operations active until 1988. The recent resource update incorporates previously unused drill hole data and historic mining pit surveys, enabling a more robust geological model and reducing the proportion of Inferred resources from 8.3 million tonnes to 4.8 million tonnes, while increasing Indicated and Measured resources.

Pathway to Commercialisation, The Pre-Feasibility Study

With the resource upgrade complete, Clara is progressing to a Pre-Feasibility Study (PFS) aimed at validating key mining, coal quality, cost, and financial assumptions. The PFS will refine the mining plan, sequence, and coal preparation process design, providing a clearer picture of the project's economic viability. This study is expected to take between six to nine months, contingent on funding availability.

A critical component of the PFS is a planned Resource and Quality Drilling Program, which includes four cored holes and eight chip holes. This drilling will further upgrade the resource classification, particularly expanding the Measured category, and improve understanding of coal seam depth, thickness, and quality, especially the coking properties and washability that are vital for market acceptance.

Coal Quality and Market Outlook

The Ashford seam coal is classified as medium volatile bituminous, with favourable coking properties supported by historical studies. The coal exhibits moderate to high vitrinite content and low sulphur levels, characteristics that underpin its suitability for metallurgical applications. Clara’s Managing Director, Peter Westerhuis, highlighted the cyclical and volatile nature of the global coal market but expressed confidence in Ashford’s technical and commercial robustness, noting anticipated long-term demand growth for coking coal amid limited new supply sources.

Despite current market challenges for junior coal companies, Clara is taking a prudent approach by reducing non-essential expenditures and exploring opportunities to augment its project portfolio. The company’s strategy reflects a balance between navigating near-term headwinds and positioning Ashford to capitalise on future market upswings.

Geological and Operational Insights

The Ashford coal basin is a narrow, 80-kilometre-long Permian deposit characterized by complex structural geology, including thrust faults and variable seam thickness. The updated resource model benefits from extensive drilling, over 250 holes, and detailed geological interpretation, supported by modern core sampling and quality analyses. Mining assumptions for the resource estimate include open cut and highwall mining methods, with coal beneficiation expected prior to export.

Environmental constraints appear manageable, with a 50-metre buffer zone applied near the Severn River. The resource estimation complies with the latest Australian guidelines and JORC reporting standards, ensuring transparency and reliability for investors and stakeholders.