A review of the operating cost assumptions used in the feasibility study and the valuation for Realm Resources Limited’s (ASX:RRP) 51-percent-owned thermal coal project in Central Kalimantan has resulted in a 20-percent reduction in the proposed free-on-board cash cost over the project’s mine life.

As quoted in the press release:

Industry operating costs have declined by up to 30% over the last two years in parallel with falling commodity prices and profitability, and the strengthening US dollar. Katingan Ria’s unit operating cost forecasts have subsequently been reduced by approximately US$8/t or 20% following a review by management and their consultants. Importantly the forecast life of mine (LOM) unit cost for the operation before royalties has reduced to ~ US$31/t which is below the current spot coal price expected for Katingan Ria coal (i.e. 4,200 Kcal/Kg GAR at US$36/t).

Click here for the Realm Resources Limited (ASX:RRP) press release.

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