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  • Fox Resources Starts Drilling At Bundaberg Coking Coal Project 0 comments
    Nov 29, 2013 12:36 AM

    Fox Resources (ASX: FXR) has started its highly anticipated six hole drilling program at its Bundaberg Coking Coal Project in Queensland after a heritage survey found no impediments to drilling.

    This program will confirm the continuation of the coal seams intersected by International Coal (ASX: ICX) and Hancock Prospecting in their EPC 2196 into Fox's EPC 1523.

    Drilling is underway on the first hole Fox 6, that is located about 4.5 kilometres southeast of International Coal's BUN013P hole which intersected 4.16 metres of coal over a 6.87 metre interval from a depth of 343.44 metres.

    Given the interpreted dip and strike of the coal seams in the area it is expected that the first hole will intersect the same stratigraphic position at around 300 metres down hole.

    The entire drill program is expected to be completed within three weeks with assay results expected early in 2014.

    This comes on the back of chairman Terry Streeter's recent resignation as chairman of Western Areas (ASX: WSA), a move that is widely expected to result in his focusing more of his attention on Fox.

    Streeter, who has a track record of building junior companies having a cornerstone stake in Jubilee Mines and guiding Western Areas, said the start of drilling to confirm the continuation of the coal seams intersected by International Coal and Hancock Prospecting was of paramount importance to the company.

    Drilling details

    Following the drilling of Fox 6, the sequence for the remaining five holes will be influenced by the observed geology from the completed holes along with any weather related limitations.

    These vertical rotary hammer boreholes are expected to be drilled along five nominal west-to-east-lines.

    All holes will be geologically and geophysically logged with chip samples tested for moisture and crucible swell number.

    This will identify if the coal seams:

    - Intersected in EPC 2196 at depths of 250 metres to 588 metres are continuous and extend into Fox's EPC1523;
    - correlate with and are continuous to shallow seams intersected in historical drilling;

    Once drilling is completed, a structural model will be generated so as to allow resource estimation.

    Fox intends to expand its exploration activities on its existing Queensland coal tenements, acquired in late December 2012 with projects including Bundaberg, Styx, Emerald, Springsure, Alpha, and Eromanga.

    Bundaberg Coking Coal Project

    Based on several geological consultants' reports and previous investigations, the most promising area within EPC1523 is a 15 kilometre north-south corridor along the western margin of the tenement.

    This corridor has the potential to host a small to medium sized coking coal deposit in the order of 5 million tonnes to 20Mt.

    Multiple coal seams ranging from 0.2 metres to 2 metres thick may be present over a stratigraphic interval of 5 to 20 metres. The available coal quality test work indicates that prime coking coal is potentially present.

    The project also benefits from good access to key infrastructure.

    Funding for the exploration program is covered by the $3.8 million package secured in early October from the Lind Partners' Australian Special Opportunity Fund.

    Analysis

    The start of drilling at the Bundaberg Coking Coal Project comes as chairman Terry Streeter is expected to focus more of his time on growing Fox Resources.

    Drilling will allow Fox Resources to discover if the coal intersected in the adjacent EPC2196 extends into its permit. That International Coal and Hancock Prospecting have already established a 28.5 million tonne Inferred Resource with hard coking coal characteristics is a hint of what Fox could find.

    Its success will undoubtedly be value-accretive for Fox with a very undemanding Market Cap of $7.36 million that is leveraged to success.

    Proactive Investors Australia is the market leader in producing news, articles and research reports on ASX "Small and Mid-cap" stocks with distribution in Australia, UK, North America and Hong Kong / China.

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