Pan Asia commissioned Kopex to perform the study, and the Australian Securities Exchange-listed company said there was a possibility that increases to the longwall dimensions could further improve the project’s reserves, productivity and economics.

“Initial indications from the geotechnical assessment are that the ground conditions will be better than those encountered at the Indominco underground mine in East Kalimantan,” Pan Asia said.

“This is an important and positive factor to the project as there were no major geotechnical issues encountered at the Indominco mine. Based on the potential benefits as described, Kopex recommends that the TCM project be advanced to full final feasibility stage.”

Another drilling program is planned to further drill out the proposed southern underground mining area, underpin future planning and possibly expand resources to the east.

Testwork to date indicates the product thermal coal will be export quality, with an average calorific value of 6534 kilocalories per kilogram at moisture of 5.65% and ash of 14.24%, both on an air-dried basis.

While Kopex’s study was based on access to the underground seams through inclined drifts, it recommended that possible access from an open cut highwall should be considered in future studies.

The project hosts 22.4Mt of indicated and 30.8Mt of inferred resources over a 4148 hectare area.

Pre-development open cut mining is targeting 1Mtpa in 2011, and the project is next to the ATA open cut mine which strengthens the possibility that development could start from a highwall.

Pan Asia owns 75% of the TCM project and its shares closed down 1c to 14c yesterday.