International Coal (ASX: ICX) remains actively involved in discussions and planning with a number of parties for the development of its Consuelo and Bundaberg coking coal projects in Queensland and is hopeful of achieving a positive outcome.
In addition, the company expects to start drilling three or more holes at the Consuelo Project in the Bowen Basin in the coming weeks.
Chairman John Lester said that thermal coal prices had probably bottomed along with the share prices of coal exploration companies.
Indeed, a recent study by Woods Mackenzie had found that global coal market fundamentals remained strong with demand increasing to 2020 with prices following suit.
He noted that while the last year had been a challenging one for junior exploration companies due to a blow out in both development and infrastructure costs as well as the fall in thermal coal prices, the company was optimistic about its future.
"We believe that the next year will be a much easier and better one for International Coal."
And there is much to be optimistic, given the company's drilling successes at the Bundaberg Coking Coal Project with Gina Rinehart's Hancock Prospecting as well as the recognised potential of its Consuelo Project.
Its JV with Hancock has also allowed the Bundaberg project to be drilled and explored by an extremely competent team while conserving the company's cash.
The company also has plans currently underway with several parties to construct infrastructure for developing the South Blackall project, which has an Inferred Resource of 1.2 billion tonnes of thermal coal.
Bundaberg Coking Coal Project
International Coal and Hancock have recently drilled two chip holes that intersected additional coal and demonstrated the continuity of coal seams at the project, providing them with a better understanding of the resource's structure.
Drilling has shown that the coal seams extend to the northeast, raising the likelihood that the current Inferred Resource of 28.5 million tonnes of hard coking coal is just the tip of large and high demand coal resource.
Hancock has financed over 20 holes and has met the earn-in requirements to enable the exercise of its option to acquire a 25% interest in the project.
Bundaberg is currently envisaged as a small to medium underground mine development with development starting in the mid-term.
"We are hopeful that these results and additional work will allow the company to increase its resource over the coming months," Lester added.
Consuelo, which has an Exploration Target of between 800 million and 1,700 million tonnes of high grade coal, is located just 25 kilometres from an existing rail head on the Blackwater rail system.
The company has negotiated a joint venture earn in with Coal Face Resources for the project, which could start production in late 2016 to early 2017 followed by longwall production in 2020.
The upcoming drilling program is designed define the presence of coal and its quality, which the company expects to be soft coking coal.
Consuelo has large resource potential and could produce coal for 30 years.
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