North Goonyella Update
*excerpt from Peabody's Feb. 6 Earnings press release
With regard to the company's North Goonyella Mine, Peabody has now identified a base case that targets limited continuous-miner volumes in 2019 with longwall production beginning to ramp up in early 2020. The base case contemplates approximately 2 million tons of sales from North Goonyella in 2020.
As part of Peabody's recovery plan for North Goonyella, the team is executing a multi-phased re-ventilation and re-entry project targeted to commence in the first quarter 2019. The stage-gate approach provides an opportunity to periodically re-evaluate progress, costs and investments.
At this time, Peabody expects idling and project costs to average $30 to $35 million per quarter in 2019, with first quarter costs expected to come in above the high-end of that range. The company is targeting approximately $110 million in capital for North Goonyella, including previously planned new longwall equipment. In addition, the company expects cash outlays associated with leased equipment settlements. Peabody also is anticipating recovery of $125 million in insurance proceeds in 2019. Peabody will continue to provide periodic updates on North Goonyella on PeabodyEnergy.com.
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