There are a total of five seams present in the area and full coal quality data of the cored piles indicates the coal has low sulfur and ash and energy levels consistent with Surat Basin coals.

Cuesta Coal expected to significantly increase the size of the maiden resource estimate in the coming months, managing director Matthew Crawford said.

“The initial JORC resource estimate for the East Wandoan project is another significant milestone for Cuesta. We are focused on developing all of our projects and to be able to report a JORC-compliant resource estimate within one year of commencing drilling at East Wandoan is particularly encouraging,” he said.

“It illustrates the strength and capabilities of our technical team and the quality of our projects.

“Cuesta is actively progressing with its capital raising activities and we continue to target an ASX listing in the first quarter of this calendar year.

“With drilling expected to commence shortly at East Wandoan, a strong asset portfolio, and the recent agreement with Beijing Guoli Energy Investment Co Ltd to invest $20 million into the company – subject to due diligence – Cuesta is well placed for growth.”

A 3000m drilling program at East Wandoan is planned to commence in late March of this year and this will be the first step in building a large resource at this project.

Closer-spaced drilling in the current resource area should be sufficient to allow the lower two seams to be more clearly defined and included in the resource estimate. The current resource area is open to the north and east and further drilling outside of the current resource area is planned as part of the 2012 drilling campaign.

Cuesta was formed in September 2011 to acquire all the securities on issue in a private Queensland-focused Australian coal exploration company called Blackwood Coal in preparation for a public listing.

Blackwood Coal is a coal exploration and development company established in November 2009.

Since then the company has acquired a portfolio of 33 EPCs/EPCAs in the Bowen, Surat/Clarence Moreton and Galilee coal basins in Queensland, nine of which have been granted.

It has a pipeline of projects which range from advanced exploration requiring resource definition drilling to conceptual lateral opportunities to be tested by scout drilling.

Cuesta has received shareholder approval for Beijing Guoli Energy’s $20 million injection into the Queensland coal explorer in the lead up to its initial public offering.

On January 10, Cuesta announced it had snared a legally binding conditional subscription agreement with the Chinese company.

Cuesta shareholders approved the subscription at its extraordinary general meeting on February 2.

The investment is scheduled to take place in two stages. Stage one will consist of $5 million at 25c pre-IPO in January, with the second stage of the investment including $15 million at the IPO price.

The investment still needs Chinese regulatory and FIRB approval, while Guoli is expected to complete its due diligence.