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International Coal shaping as emerging force in Eromanga Basin coal region

International Coal (ASX: ICX) has followed up its sterling rise in share price (from $0.20 ASX listing price to $0.37), by rapidly expanding its footprint for coal with applications for 11 Exploration Permits for Coal (EPC's) in the Eromanga Basin area and the surrounding region in SW Queensland.

The recently applied for EPC’s are in the Charleville and Quilpie surrounding districts. Many of these applications "are significant in size" and are contained in the emerging Eromanga Basin coal region.

In total, the applications cover a very large 8,800 square kilometres and complement the company’s existing EPC 2197 at South Blackall, rendering International Coal as a significant player in the fast growing region for coal exploration.

International Coal recently intersected a significant coal seam structure from drilling at its South Blackall Project (EPC 2197) in the highly prospective region of south western Queensland.

The company will outline later its plans for ongoing exploration in the region following the completion of its current drill programme at EPC 2197 in South Blackall.

Regional Infrastructure Development

ICX has welcomed the ongoing reports regarding development of infrastructure in the adjacent Galilee Basin as outlined the recent reports concerning the GVK Group’s $1.26b investment in a number of Hancock Coal projects that border the Eromanga Basin.

ICX said it understands that Hancock Coal is well advanced in its plans to develop a rail line from its projects in the Galilee Basin to various ports.

The ICX board intends to undertake dialogue in the future regarding the potential for rail access to the Eromanga Basin and specifically to its flagship EPC 2197 project and potential additional exploration permits.

Recent news

International Coal recently intersected a significant coal seam structure from drilling at its South Blackall Project (EPC 2197) in the highly prospective region of south western Queensland.

The multiple coal seams were intersected from 45 metres:

- Very large scale
- Single guage railway that goes through ICX tenement
- Very flat lying ground, very conducive to expansion

Both the Galilee and Eromanga Basin coal seams are present in the permit area, with the lower part of the Winton Formation in the Eromanga Basin targeted as a potential coal source.

EPC 2197 is located approximately 120 km north of East Energy Resources (ASX: EER) EPC 149, where East Energy has confirmed a maiden Indicated Resource of 469 million tonnes, within an Inferred and Indicated Resource of 749 million tonnes, and an early production estimate of 20 million tonnes per year.

This resource was estimated to an open pit depth of 150 metres, within a coal seam of continuous mineralization, confirming the discovery of a major new thermal coal basin.

Immediately east of International Coal’s EPC 2197, is U.S. listed Sentry Petroleum’s (NASDAQ OTC: SPLM) Exploration Permits for Petroleum (ATP’s) 862 and 864.   Sentry Petroleum has also reported a “2,000 square mile non JORC coal deposit” located in oil drilling on EPP 862 and EPP 864, which are both adjacent to the East Energy Resources thermal coal discovery.

Analysis

Based on the Geologist’s Report, EPC2197 has potential for large tonnages of domestic and export thermal coal.

The Moultrie Group has estimated potential tonnages of between 9.13 and 9.32 billion tonnes for both formations within International Coal’s EPC2197 tenement.  (For the Winton Formation, the potential coal tonnage was estimated at between 8.8 and 8.9 billion tonnes).

Coal floats and coal explorers in Queensland have been among the best performers on the ASX.  In the main, they have lifted valuations on exploration results and definition of JORC resources.  Judging by their success, and taking a line through their exploration tenements relative to International Coal's, there is plenty of scope for exploration success.


Article originally published at: http://www.proactiveinvestors.com.au/companies/news/23070/international-coal-shaping-as-emerging-force-in-eromanga-basin-coal-region-23070.html