International Coal (ASX: ICX) and Coal Face Resources have lodged an application for a strategic cropping land compliance certificate and environmental authority amendment to clear the way for the grant of the Consuelo Project exploration permits in the Bowen Basin, Queensland.
Consuelo is located less than 15 kilometres northwest of the Rolleston Mine, one of the lowest cost operating open pit mines in Australia.
Rolleston is a joint venture between Xstrata Coal Queensland (75%), Sumisho Coal Australia (12.5%) and IRCA Rolleston (12.5%) and is reported to produce 5-10 million tonnes of coal per annum.
Current economic reserves at Rolleston are about 173Mt with further exploration planned.
Coal Face has also negotiated a Native Title and Cultural Heritage agreement that will cover the Consuelo and Don Juan projects.
Don Juan, located in the Surat Basin, is also subject to a joint venture between the two companies.
International believes the Consuelo Project (EPC 2318, 2332 and 2327) has the potential to be a flagship thermal coal project.
International and Coal Face have done significant work to date to pre‐evaluate the project, which targets the Late Permian Bandanna Formation in the Bowen Basin and has an exploration target of 800 million tonnes to 1.7 billion tonnes.
Seams are continuous up to 2 kilometres within the 402.1 square kilometre project area.
Modelling indicates the Consuelo Project could host significant mineable open cut and underground tonnages.
Coal quality is exceptionally high - average raw ash content ranges from 8% to 30% with moisture 3% to 8%.
International has the option to increase its interest in Consuelo to 71% from the existing 20% by supporting an extensive exploration program of $6 million over the next three years.
It had issued 17 million shares, 10 million options and $100,000 to Coal Face for the initial 20% interest.
Consuelo is located less than 20 kilometres from the Blackwater rail system which is owned and operated by Aurizon, previously known as QR National, and services Gladstone and other ports.
In addition, Aurizon (ASX:AZJ) has reached a non-binding term sheet to jointly progress the development of rail and port infrastructure to unlock Galilee Basin coal reserves with GVK Hancock that could underpin further growth in the Bowen Basin.
The Meteor Downs South deposit (Endocoal Limited) is around 30 kms to the north west of the tenements.
International has cash in hand of $2.2 million as of 31 December 2012 and a market capitalisation of $18.58 million.
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