Endocoal said it intersected two coal seams in the first exploration hole drilled at the tenement.

The coal seams intersected were approximately 3m thick and were intercepted at depths from 311m to 318m.

The company said it was the first hole of a four-hole scout drilling program that commenced in mid-March.

While the tenement has had little exposure to exploration in the past, Endocoal confirmed initial lab testing on the coal seams contained coking properties.

It will now move towards undertaking further testing on the coal seams, while additional cores will take place to determine ash and coal washability characteristics.

Stockyard Creek is strategically located about 48km south of the Moura-Gladstone rail line and adjoins to Endocoal’s Cedars and Barfield tenements.

Endocoal chief executive officer Tim Hedley said results from drilling at Stockyard to date suggested the project could become a major focus tenement for the company.

“This coal discovery at Stockyard Creek, though at a very early stage, provides a further opportunity for Endocoal to expand its coal portfolio,” Hedley said.

“Stockyard Creek has potential to compliment the earlier discoveries of thermal coal at Orion Downs, plus [pulverised coal injection] coal at Rockwood.”

Endocoal has a number of prospective tenements in the Bowen Basin, with its Rockwood and Orion Downs tenements being its flagship projects.

Earlier in the year, Endocoal completed a $12 million capital raising and welcomed equity groups AMCI Capital and Macquarie Capital as new shareholders.