The initial resource includes 34.3Mt in the measured category and 27.7Mt indicated.

Six rigs are currently drilling at the project and another two rigs are being mobilised.

The project is about 5km from an existing haul road and near a proposed rail line. Hunnu has applied for a mining licence and aims for first coking coal in the second half of this calendar year.

Quality analysis of five coal seam groups rated the energy value at 7008-7455 kilocalories per kilogram on a dry and ash-free basis, with total moisture at 3.99-6.51%, ash at 17.54-39.01% and sulfur at 0.28-0.65%.

Large-diameter drilling this month will provide bulk samples for further testing by laboratories and for sampling by potential offtake partners.

The Tavan Tolgoi field is estimated to hold more than 6 billion tonnes of coking and thermal coal.

Hunnu managing director George Tumur played a leading role in the development of the Ukhaa Khudag (UHG) open cut mine about 45km north of the Tsant Uul project.

Considered the benchmark for what coal mines can achieve in the country, the UHG mine is ramping up to 10 million tonnes per annum and plans to hit 15Mtpa in 2013.

Hunnu’s Bulanbulag, Khuree-2 and Tsokhio coking coal projects are also close to the Chinese border in the South Gobi region.

Hunnu owns 90% of the Tsant Uul project. Its shares were down 7.5c to $1.28 this morning.