International Coal (ASX: ICX) has been green-lighted two of four tenements in the promising Consuelo Project in the Bowen Basin, handily located between Glencore Xstrata's Rolleston Mine and Bandanna Energy's (ASX:BND) Arcadia Deposit.
There is an Exploration Target range of between 800 and 1700 million tonnes of coal at Consuelo Project.
While drilling has not yet commenced, historical evidence from the region suggests the Bandana seams could potentially yield a washed semi-soft coking coal product.
ICX's JV partner, Coal Face Resources Pty Ltd has been granted EPC 2318 and 2332, a third EPC (2327) is going through a mandatory Native Title notification and objection period.
A joint venture arrangement with Coal Face Resources Pty Ltd provides ICX with an earn up to a 71% interest in the Consuelo project.
Chief executive Officer for ICX, Glenn Simpson said, "This is great news for the company and provides certainty of tenure over the project.
"It gives us the green light to move forward with our plans to explore and develop this flagship project in
the Bowen Basin".
Simpson said, "International Coal now has its foot on highly prospective land in the Bowen Basin, a hard coking coal discovery near Bundaberg in the Maryborough Basin, and longer term, thermal coal projects in the Surat and Eromanga Basin. There are not too many explorers with our size market cap that have developed assets of that calibre".
ICX believes the Consuelo Project can yield a high grade thermal to semi-soft coking coal product from a combined open-cut and underground operation.
"While we still need to see the results of the proposed exploration program, the historical evidence suggests the project has high potential for coal at depths currently mined using open-cut and underground methods and we are close to existing rail and port infrastructure", Simpson said.
ICX will commence immediately with land access and cultural heritage clearance work. EPC 2327 is going through a native title advertisement process which takes a minimum of 4 months.
However, an agreement is already in place with the key native title claimant (Bidjara People) which includes a non-objection clause, clearing the way through to grant at the end of the advertisement period.
The agreement also establishes a cultural heritage management system enabling cultural heritage clearances to be moved forward upon grant.
ICX is looking to have a drill turning at the project in the near future.
Consuelo Project Details
The Consuelo Project tenements are located in the Southern Bowen Basin. The tenements are 10 to 20 kilometres south east of the existing Glencore Xstrata Rolleston open pit mine and only 25-30 kilometres from the rail haulage line that runs adjacent to the Rolleston mine.
The existing rail line (Blackwater line) currently services the Barney Point Coal terminal, the RG Tanna Coal terminal and the Wiggins Island Coal terminal (Stage 1 under construction).
The Meteor Downs South deposit (Endocoal Limited) lies 30 kms to the north west of the tenements and the Arcadia Project (Bandanna Energy Limited) is just east of the project. The Consuelo tenements (EPC 2332, 2318, 2925 and 2327) are all within close proximity of one another in a well-defined area of the Bowen Basin.
Modelling indicates the Consuelo Project could host tonnages suitable for both open cut and underground mining. Coal quality based on historical data from the region indicates average raw ash content ranges from 8% - 30% with moisture 3% - 8%.
Washability studies and clean composite results released by Bandanna Energy in the neighbouring Arcadia Project have provided evidence that the Bandanna seams could make a semi-soft metallurgical coal with a swell of 2.0 - 4.0 possible.
There are known to be big wraps on the Consuelo project, particularly given the positioning of the project. The tenements are 10 to 20 kilometres south east of the existing Glencore Xstrata Rolleston open pit mine and only 25-30 kilometres from the rail haulage line that runs adjacent to the Rolleston mine.
ICX bears a Market Cap. of $13 million, which looks tardy against its portfolio of projects and the interest from Asian interests in its coal assets.