Drilling restarted three weeks ago after delays caused by heavy rain.
Last month the junior set a total exploration target of 2.5-3.5 billion tonnes by December with the drilling program targeting the Bundi, Norwood, Miles North and Miles East project areas.
Under the JV agreement, the Chinese coal producer will gain a 51% interest in Metrocoal’s Columboola project by spending $A30 million on exploration.
The deal already has Foreign Investment Review Board approval and Chinese government agencies are expected to approve it in the next two months.
In late February Metrocoal entered into a co-development agreement with Arrow Energy and Shell CSG that enables the companies to extract the coal seam gas and mine coal in overlapping areas.
The agreement covers overlapping portions of Metrocoal’s EPC 1166 and EPC 1251 coal tenements and the gas tenements held by Arrow and Shell.
Metrocoal ended the March quarter with $34,000 cash.
Shares in the junior closed up 4.6% to 34c on Friday.
