Celsius Coal (ASX: CLA) is targeting a resource upgrade in a new multi-rig diamond drilling program at the company's (80%) Uzgen Basin coking coal project in the Kyrgyz Republic, which will cover between 4000 and 5000 metres.
The company also recently commissioned a first-phase coal market study of the Xinjiang province in China, which identified that the Xinjiang coking coal market is positioned for import growth - which is driven by local supply constraints.
The drilling will commence in around one week, and will look to build on the maiden JORC Inferred Resource of 255 million tonnes from 2012 - while also increasing some resources to the higher confidence Indicated category.
Also a number of larger diameter PQ core holes will be drilled to procure samples that will be used to more accurately determine certain coking coal specifications, particularly coke strength after reaction.
Metallurgical testwork indicates coal of coking quality with moderate sulphur, low phosphorous and an average FSI of between 7-7.5 (almost all results greater than 6.0), with good consistency across seams. High yield (>60%) into <10% ash product coal.
Celsius will also collect bulk samples for testing, with the aim of attracting customers and off-takers.
The company had $4.4 million in cash at the end of March 2013. During the period the company also organised a strategic funding arrangement from Blumont Group for A$10 million.
Celsius development and production plan
The company's development plan is around a 1-2Mtpa export operation selling raw coal at the mine gate and transporting coal to market by road, before the potential ramp-up to a longer term operation where around 5-10Mtpa will be targeted.
Proactive Investors Australia is the market leader in producing news, articles and research reports on ASX “Small and Mid-cap” stocks with distribution in Australia, UK, North America and Hong Kong / China.