Stanmore Resources has reached a $100 million-plus deal with neighbouring tenement holders to pave the way for a mining operation at its Isaac South project near Moranbah.

The Bowen Basin coal player is now prioritising necessary studies and approvals to fast-track an investment decision on the project, expected to act as a cost-effective extension of the Isaac Downs mine and prolong the mine life at its Isaac Plains Complex.

It has executed an agreement with Moranbah South joint venture partners Anglo American and Exxaro for the rights to explore, study and then apply for a mining lease over a designated area on their tenements (MDL277 and EPC548) immediately adjacent to Isaac South.

The deal includes an upfront payment of $US15 million (about $22 million Australian) along with deferred consideration of $US20 million (about $AU30 million) upon first coal being mined or about 10 years from grant of a mining lease and a capped $US40 million (about $AU60 million) royalty component.

Stanmore said the designated area was expected to contribute an estimated 50 per cent of the total mineable resource of the enlarged Isaac South project.

The project is expected to produce a high-quality metallurgical coal product, similar to that mined at Isaac Downs.

“We will now work closely and swiftly with State and Federal Government Departments and regulators to progress the Environmental Impact Studies and all associated work and secure all required regulatory approvals to submit an investment case for internal approval to start construction of the new pit and associated infrastructure,” chief executive officer Marcelo Matos said.

“It will be important to ramp up operations on time to ensure we have continuity of operations at our Isaac Plains Complex, which may potentially add another 15 years at the same rate of about 4 million tonnes per annum of ROM coal mining, and likewise ensure continuity of employment for our workforce at the Isaac Plains Complex.”

Stanmore aims to be hauling run-of-mine coal from the Isaac South deposits to its existing ROM coal stockpiles at Isaac Downs next year.

Related: Stanmore turns its eye to Eagle Downs future

It comes as the company considers its development options at the Eagle Downs metallurgical coal project, which it recently acquired in transactions with South32 and Aquila.

The greenfields Lancewood coal project is also in the project pipeline.

Stanmore took full ownership of the site and adjoining Wards Well tenements in 2022 in major deals that saw it acquire a suite of former BHP Mitsui Coal assets in the Bowen Basin.

A conceptual mining study was completed last year, when Stanmore said it had identified an opportunity for a new 10-15-year open-cut mining operation with low start-up costs via the Lancewood-Wards Well site.

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