Fox Resources (ASX:FXR) could well increase resources at its Bundaberg Coking Coal Project in the Maryborough Basin, Queensland, with the last drill hole confirming the lateral continuity of the modelled coal seams.
Notably, the upper seams that were not included in the resource estimate are thicker than intersected elsewhere in EPC1523.
Increasing the current Inferred Resource of 101 million tonnes could improve the viability of the project.
The analytical and coal quality analyses have also been completed with results pending.
"With infill drilling to increase the geological confidence in the 101Mt Inferred Resource the thicker upper seams in Fox 3 may provide further additional tonnage potentially improving the viability of the project," managing director Paul Dunbar said.
"A conceptual mining study into possible development options, currently underway, is expected to provide a focus for the next phase of exploration."
Fox is well funded for exploration having recently raised about $4.2 million from its fully-underwritten entitlement offer.
Fox 3 Results
Fox 3, located about half-way between the previously reported Fox 1 and Fox 6 holes, intersected 1.54 metres of coal in five seams that are thicker than 50 centimetres over a 4.59 metre interval.
This includes two separate coal seams separated by 3.05 metres from 197.58 metres downhole.
Importantly two of those seams, GL1 and GL2, correlate with the laterally continuous coal seams modelled as part of the Inferred Resource estimate.
The main coal seams intersected are interpreted as being the same coal measures intersected on the adjacent tenement.
The clean coal composite analysis has been completed with discussions ongoing regarding the results of this work being made available to the company.
Provision of the results is being hampered by an external company who were engaged to manage the exploration at Bundaberg project being placed into administration, discussions are ongoing with the laboratory who undertook the analysis with the aim of the results being provided directly to the company.
The clean coal composite results are critical in determining the path forward for Fox in respect to the Bundaberg Project.
If, as expected, they are similar to those released in March by International Coal (ASX:ICX) on the adjacent tenement EPC 2196, they would prove the very high quality of the coal within the 101Mt Inferred Resource at its 100% owned Bundaberg project, EPC 1523.
Fox is in the process of undertaking a conceptual mining study into the various development options for the Bundaberg project and to direct future exploration toward the areas of the resource that have the greatest potential to be developed.
Once results of this study are known, the next phase of exploration will be planned.
It is expected that further exploration will include infill drilling with large diameter diamond core and further coal quality tests.
Additional exploration drilling is also likely to test the previously identified Exploration Target and several conceptual targets.
Fox Resources had recently defined an Inferred Resource of 101.2 million tonnes of coking coal at its Bundaberg Project (EPC1523) in the Maryborough Basin in Queensland.
This is nearly three times larger than International Coal's coal resource in the adjacent EPC2196.
In addition, Fox had in early April identified a significant strike extension to the coal seams with an Exploration Target of 20 million to 50 million tonnes.
The company has benefitted from an information sharing arrangement it struck with ICX for their adjacent hard coking coal projects.
This has already removed the need for infill drilling and could lead to a joint development in the future.
That the final drill hole at the Bundaberg Coking Coal Project has not only confirmed the lateral continuity of the modelled coal seams but also intersected thicker upper seams bodes well for Fox Resources to increase Resources beyond the current 101 million tonnes.
This would improve the viability of the project.
Potential share price catalysts ahead include the release of the analytical and coal quality analyses, infill drilling with large diameter diamond core and exploration drilling to test the Exploration Target of 20 million to 50 million tonnes.
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