Ashford’s Modest Capex Masks Key Risks Ahead for Clara Resources

Ashford Project Overview

Clara Resources has provided an insightful update on its Ashford Coking Coal Project in New South Wales, highlighting a scoping study that points to strong economic potential. The company holds 100% ownership of a high-quality coking coal resource, with measured JORC resources of 14.5 million tonnes on one exploration lease and promising extension potential on an adjacent lease. The project benefits from a history of open-cut mining dating back to the mid-20th century, with no legacy environmental permit issues, and operates under a stable royalty regime.

Economic and Operational Highlights

The scoping study outlines a modest capital expenditure of AU$133.5 million, including approximately AU$100 million allocated to pre-production activities. With an estimated mine life of 12 years and an average annual run-of-mine production of 1 million tonnes, the project forecasts a post-tax net present value (NPV10) of AU$156 million and an initial payback period of less than 12 months. The coal quality tests suggest the potential to produce semi-hard, and possibly hard, coking coal products that are attractive to global steelmakers, particularly in Asian markets.

Infrastructure and Logistics Advantage

A key enabler for Ashford’s viability is its access to existing infrastructure, notably the ARTC Inland Rail Project, which is complete to North Star, near Ashford. This rail connection links the project directly to the Hunter Valley rail network and Newcastle port, facilitating efficient coal export logistics. The project’s low-risk, small open-cut mining approach leverages proven technology and methods, further reducing operational uncertainties.

Resource Expansion and Funding Strategy

Clara Resources is actively pursuing resource growth through a maiden drilling program on the adjacent exploration lease, aiming to confirm and potentially increase the JORC resource base. The company has initiated a capital raising of approximately AU$1.6 million, comprising a placement and a fully underwritten rights issue, priced at $0.003 per share. These funds are earmarked primarily for advancing the Ashford project development and exploring new value-accretive opportunities.

Community and Environmental Engagement

Stakeholder engagement remains a priority, with ongoing consultations involving pastoralists, Gomeroi native title holders, local chambers of commerce, landcare groups, and government bodies. This collaborative approach aims to ensure smooth progress through environmental assessments and permitting phases, which are critical next steps before moving to a definitive feasibility study.