Now this is likely to be just a start as Ascot Resources' chairman and CEO Andy Caruso is known to want to grow the Colombian business via asset acquisitions.
As well, surface geophysics and mapping do suggest the potential for further increases to the coal resource base.
The resource upgrade from 10.7 million tonnes follows a recent acquisition of a concession adjacent to its 90% owned Titiribi project - which is located just 2 kilometres east of the Rio Cauca River and south of the Rio Amaga River with established markets and port.
The revised estimate was a culmination of further analysis of the company's extensive Phase 1 drilling and exploration work in 2013, including additional review of, drill hole results, ground geophysics and resistivity data, and photo-geological information.
Located only 70 kilometres from the state capital of Medellin, Titiribi is close to existing utilities and infrastructure.
Which provides grounds for the company to meet its objective of fast-tracking the project into development, targeting initial production by 2H 2015.
Additional resource potential
The Resource estimate was made to a depth of 300 metres and based on work done to date Andy Caruso believes that there is a good possibility that coal continues into the western part of the Lara concession and to the south of the indicated tonnage area in the Arrayanal concession.
So expect the company to undertake additional drilling at Arrayanal, as well as infill drilling on El Silencio/El Balsal and Lara, to potentially further increase its JORC resource.
Pre-Feasibility Study and Project Economics
The work has the potential to enable Ascot to further expand on the Pre-Feasibility Study (NYSE:PFS) completed in 2013 and obtain greater clarity of the economic viability of the Titiribi Project.
In August 2013, the PFS demonstrated the technical and economic feasibility for starter mining operation at Titiribi.
The PFS was based on the JORC Measured and Indicated components of the total coal resource estimate of 8.1 million tonnes, with the starter mine projected to have a minimum 5 year Life-of-Mine (LOM) based on production rate of up to 400,000 tonnes per annum.
Measured and Indicated resources are now 16.6 million tonnes so this would likely expand the mine life.
In August, the study outlined an initial start-up capital of just US$7.8 million, with a low average cash operating cost of US$44/t at mine gate (US$84/t FOB port).
The outcomes were based on a blended metallurgical coking coal product with low ash, ultra-low phosphorus, medium volatiles and Free Swell Indexes (FSIs) averaging 6.7.
Importantly there was opportunity for upside to the PFS economics and to the resource, coming from exploration potential along strike from existing concessions, which today's upgrade has confirmed.
Sedgman Limited (ASX:SDM) became a cornerstone investor after taking a $1 million strategic stake in the company in 2013. While in December existing cornerstone investor, Resource Capital Fund V took a 17-month unsecured loan note raising $400,000 for the company.
The increase in resource base should assist project economics at Titiribi.
While under the radar for now, given tight market liquidity, Ascot Resources has the potential to surprise given its "bite-sized" Titiribi Project in terms of CAPEX and its proximity to existing infrastructure could provide it with a straight line into production in late 2015. Which at a market cap. of $4 million factors little of that upside in at present.
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