The Group retained a royalty on the Groundhog anthracite project located in north-west British Columbia, Canada, following its disposal of the related mining licenses in 2014 to the project’s operator, ASX-listed, Atrum Coal NL (‘Atrum’). The royalty entitles the Group to the higher of 1% of gross revenue on a mine gate basis or US$1.00/t from coal sales derived from Panorama licences.
On June 9, 2016 Atrum announced a revised PFS which outlined an underground project capable of producing 880ktpa of ultra-high grade anthracite over a mine life of 28 years.
The Groundhog royalty is classified as a royalty intangible asset on the balance sheet. As such, this asset is carried at cost less amortisation and impairments. Royalty intangible assets are amortised when commercial production commences, on a straight-line basis over the expected life of the mine.