Rinehart’s Hancock Prospecting subsidiary, Queensland Coal Investments, and International drilled six boreholes, including three core holes, on EPC 2196 near Bundaberg in Queensland late last year.
Consultants ROM Resources have modelled and evaluated the boreholes, with the results audited by RungePincockMinarco.
International Coal chief executive officer Glenn Simpson said: “The program at EPC 2196 has successfully demonstrated a significant discovery of hard coking coal.”
Seams in the lower Burrum coal measures have been correlated between the three holes.
A set of seams in the lower part of the Burrum coal measures shows coal intersections up to 2.61m and continuity. A potential working section in the GL1/GL2 seams was evident in BUN006C and BUN010C of 2.50m to 2.61m, with 0.52m to 0.19m partings.
A parting of 0.89m split the GU seam from GL1/GL2 seams in BUN010C.
Further work has been completed on seam identification and continuity. It supports the correlation of seams across the three holes, Simpson said.
“At this stage there is evidence for a working section in the seams in the lower part of the Burrum coal measures at depths between 240m and 260m,” he said.
Seams at these depths are currently mined or planned to be mined in Australia using underground methods.
EPC 2196 forms part of a joint venture agreement with Queensland Coal Investments (QCI), providing it the right to farm in on the Bundaberg project by spending $1.5 million on exploration in a two-year period to earn an initial 25%.
QCI has not exercised its initial earn‐in option as yet.
QCI may then earn a further 26% interest by spending a further $1.5 million on exploration in a subsequent 18-month period to take its total stake up to 51%.
The terms of the agreement also require QCI to pay to International Coal the sum of $2 million upon attaining the 51% interest in the project.
Simpson said that International had the benefit of working with an experienced coal mining venture partner in QCI in terms of access to funding, experience in the region and technical and operational support.
“International is well-positioned through its venture partner arrangement,” he said.
“Whilst continuing to share in the strong potential upside of the Bundaberg project via the JV, we have the opportunity of ongoing funding for the project as well as access to a team with a proven track record in the exploration and development of coal assets and an excellent network in markets important to us.”
