Out of a 25-hole program over an area of 100 square kilometres, Newland reported that 17 holes yielded these intersections in shallow depths ranging from just 15m to 120m.

The coal sequence sub-crops in the northeast part of the drilled area according to Newland’s preliminary interpretations.

The company added the sequence dips gently to the southwest at about 5 degrees.

Another seam of 1-3m in thickness was intersected about 25m below the main coal seam, with Newland observing that both seams appear correlated with the known seams in the Fair Hill Formation.

Coal quality testing of five drilling chip samples resulted in crucible swell numbers ranging from 5.5 to 8.5, indicative of coking coal properties mined by other operations in the region.

The project lies southeast of the Ensham mine and is west of BHP Billiton Mitsubishi Alliance’s Blackwater mine, with two existing rail links to Gladstone across the tenement, EPC 1230.

Further analysis results are pending, while Newland has set an exploration target of 200-250 million tonnes for the project which covers around 8000 hectares.

A second drilling program is scheduled for the June quarter, which will include diamond core holes to provide stronger information about the coal quality.

“These initial results are very encouraging and support the company’s view that we can define a coking coal deposit suitable for a large scale open pit mining operation situated adjacent to existing rail and power infrastructure,” Newland managing director Anthony Clough said.

“Our priority is to rapidly define a significant, high confidence JORC resource and begin commercialisation studies for the project.”