The company updated its last JORC statement from 2008 with another 48 holes, of which a substantial number were cored and had coal quality analyses carried out.

According to the resource estimate completed by Geological Data Design principal Tony Shellshear, the coal is considered suitable for thermal applications, has a moderate energy and is low sulphur.

According to Moreton CEO Jason Elks, Shellshear’s resource estimate is a significant outcome because it indicates the tonnage and coal quality could potentially sustain a substantial long-term mining operation.

The key drivers for advancing the project are:

• The potential for the Kingaroy project to be a relatively low 8:1 strip ratio and therefore a low cost, source of coal
• To confirm whether the coal quality results are comparable with mining operations in the region and would suit power generation activities
• Recent media reports that generators are opting for coal generation over gas due to the ability to trade gas with better returns
• 2013 reports stating mining operations in the region losing money because their coal deposits are too deep and their operating costs too high.

Next cab off the rank for Moreton is for it to complete its preliminary mine concept study to determine how much of the resource could be converted into a mining reserve and at what strip ratio.

Once that is done it will be in a position to further assess the commercial viability of the project.

Elks said the company was aware the incumbent power generator Stanwell Corporation had said it had enough coal at the Meandu mine and the adjacent Kunioon mineral development licence to supply the Tarong power stations up until at least 2035.

“Therefore Moreton has not entered into commercial negotiations or formally approached the operator – or any potential acquirer should asset sale proceed – other than to advise it of Moreton’s progress,” he said in a statement to the Australian Securities Exchange.