International Coal (ASX: ICX) has completed desktop studies indicating that EPC 2327 has the highest potential for finding coal at open cut depths of all the Consuelo coking coal project tenements in the Bowen Basin, Queensland.
These have uncovered drilling and seismic information that suggests there is potential for coal seam(s) up to 4 metres thick to occur between 45 metres and 100 metres in the northwest.
"This is an exciting prospect for the Company as recent desktop studies have revealed that this tenement has high potential for intersecting shallow coal in the Bandanna Formation - the same seams mined at the Rolleston mine nearby," chief executive officer Glenn Simpson said.
"We definitely see mine potential at Consuelo, given its high potential to produce a semi-soft coking coal product based on information from drilling at the nearby Arcadia Project and the evidence for the presence of shallow coal in the area which appear to continue down dip to form a large potential exploration target at open-cut and underground depths."
EPC 2327 will exit the native title notification period in December 2013 with grant soon to follow under the streamlined approach introduced by the Queensland Government.
Under this approach, tenement applicants whose permit has advanced to exploration permit proposal stage are encouraged to engage with landholders ahead of grant.
The company has commenced this early engagement process with a view to achieving land clearances soon after grant.
In addition, it expects to shift the focus of its early exploration efforts to EPC 2327 as recent heavy rainfall in the Rolleston area has delayed the achievement of clearances at EPC 2318 to the north.
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.
The company has also started early stage discussions with rail and port providers and consortia with a view to accessing the Blackwater rail system after 2016.
Blackwater currently delivers coal from a number of mines, including Glencore Xstrata PLC's Rolleston mine, to the Port of Gladstone,
Given the already strong potential for the Consuelo Project to deliver high grade coal, the prospect of finding further coal that is open pittable is a major boost.
The results from nearby Bandanna Energy's Arcadia Project to produce a semi-soft coking coal product significantly ups the development track stakes at Consuelo.
Discussions are alson ongoing with a number of parties for developing the project. This interest from strategic investors is a further vindication of the approach and quality of the project.
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