Consultancies Xenith and Minecraft found there were 17.4Mt of probable reserves for open cut mining and 26.9Mt suitable for underground mining.

“This reserve has been deemed ‘marketable’ by those respective consultants following extensive reviews of mining, economic and marketing data,” Bandanna said.

Xenith’s concept is to target up to six seams through opencut mining, leading to the development of punch longwall panels to access the reserves further underground.

“Minecraft has designed the longwall panels to specifically target the higher quality Pollux seam and some highwall auger panels on the equally favourable Orion 2 seam,” Bandanna said.

The company added that Salva Resources was providing “significant” input into marketing and product pricing for the coal.

The reserves were established in permit EPC 1221 along with Bandanna’s Springsure Creek permit EPC 891.

Bandanna wholly owns the Arcturus project in the Southern Bowen Basin and recently upgraded its resources by 33% to 206.3 million tonnes.

This project, along with Bandanna’s other two nearby “golden triangle” projects will require major infrastructure developments in the region.

Further studies will investigate upgrading the quality of the Arcturus coal, which is estimated to have an ash content of 14% and inherent moisture of 8.5%, both on an air-dried basis.

The air-dried basis calorific value of the raw coal is expected to be about 5662 kilocalories per kilogram (net).

Bandanna shares are down 4.8% to $1.09 this morning.