The company plans to drill up to six more holes this quarter as the JV seeks to define the strategically located tenements.

Under the terms of the agreement, QCI is able to earn up to a 51% interest in International’s Bundaberg Project tenements EPC 2194, 2195, 2196 and the EPC application 2631 through sole funding exploration expenditure of up to $3 million.

QCI can earn 25% interest through the staged development and expenditure of $1.5 million and a further 26% through the expenditure of a further $1.5 million.

In addition to the earn-in payments, the terms of the agreement also require QCI to pay to International $2 million upon attaining the 51% interest in the project.

“Drill progress has been good with a further three to six holes scheduled for the next three to four weeks,” International Coal director David Round said in a statement.

“Leading geological consultant, Salva Resources, and drillers are conducting the program under the direction of management from the JV Managers, and technical laboratory results are due from the core hole drilled within the next three to four weeks.

“Complete results from drilling and laboratory testing are expected within the next two to three months.”

The first drill hole concluded was at EPC 2196 where a chip hole was drilled to a depth of almost 300m. Following this, a geophysical log was taken of the hole, with coal seams encountered from 60m down – with significant seams of 1-2m and 2-3m encountered between 240-246m.

Following the conclusion of the chip hole, a core hole was drilled with a significant amount of core taken from the hole for quality analysis.

“International Coal is very supportive of this initiative and are encouraged by the initial drill results,” Round said.