Acquisition of the tenement immediately north of Cuesta’s 53Mt Moorlands deposit comes as part of an $18.2 million cash payment for Orion owner Hannigan & Associates.

Cuesta says Orion will be consolidated into its West Bowen project, creating two open pit opportunities targeting 4 million tonne per annum coal production over a 20-year mine life.

The project is expected to benefit from existing infrastructure as it lies only 14km from Rio Tinto’s Blair Athol mine and 260km west of Mackay and the Port of Dalrymple Bay.

A scoping study already underway is expected to be completed in the first quarter 2013.

Drilling is slated to begin in Q2 2013, with a feasibility study to be finished by early 2014 and coal production due by 2017.

Cuesta has marked the deal as its evolution from an explorer to a project developer with the potential for a significantly reduced timeframe and capital expenditure to first coal production.

“By combining our West Bowen project with the Orion coal project, we are creating a large coal project which has the potential to contain over 200Mt of coal,” Cuesta managing director Matthew Crawford said.

“Cuesta is in a unique position to continue its transformation from a coal explorer to developer/producer in the three to five-year timeframe it has set.”

Orion holds indicated and inferred coal resources totalling 83Mt and boasts an exploration target of 80-90Mt.

Although the tenement’s southern region has not yet been fully explored, Cuesta says “significant coal intersections have been encountered”