The prefeasibility study outlined the potential to establish a 2 million tonnes per annum run of mine operation for a mine life of 18 years.

For a cost of $206 million up to 2016, the project is expected to produce 1.41Mtpa of semi-soft coking coal and 0.28Mtpa of export quality thermal coal.

Coalworks has scheduled first coal exports in 2014, and aims to lock in Newcastle port capacity through Port Waratah Coal Services later this year.

An Itochu subsidiary struck a joint venture agreement with Coalworks and gained a 29% stake of the project in December for $5 million.

By funding the BFS by up to $6 million, Itochu will lift this stake to 49%.

Itochu is also making arrangements to market and sell the coal produced at Vickery South.

“We are very pleased at the support that Itochu has provided to the project as a joint venture partner for Coalworks and thank them for their ongoing commitment to getting Vickery South into production,” Coalworks managing director Andrew Firek said.

Coalworks lifted inferred resources at the project by 20% to 51 million tonnes in February.

Shares in the explorer were up 4.5% to 69.5c by mid-afternoon.