The discovery came in the last week of October, when geologists intersected an anomalous structure containing very thick intersections of Clareval seam at shallow depth, with a strike length over a few hundred metres.

The sheer size and depth of the seam has spurred Gloucester into plans to boost production even before the new seam has been officially added to the JORC-compliant resource and reserves statement.

GCL chief executive Gavin May said the Clareval seam’s proximity to existing operations would bode well for low capital requirements.

“The production increase can be achieved with modest capital expenditure of less than $30 million by adding an additional module within the existing facility at Stratford and a new product stockpile,” he said.

“This is an exciting geological discovery, as it represents one of the thickest intersections of coal found in New South Wales.”

The company is now undertaking a more extensive coal quality testing program of the Clareval coal to determine raw coal washability and saleable coal quality.

“Gloucester Coal’s high fluidity coking coal specification will improve with the inclusion of the low ash Clareval coal and we are confident of continued strong market support for the company’s range of coal products,” May said.

“We are continuing to explore and extend the Clareval limits through the Gloucester Basin and look forward to more exciting discoveries.”

Shares in Gloucester were up 43c to $3.98 in early afternoon trade today.