NSL Consolidated (ASX: NSL) has released an updated technical modelling and interpretation document that demonstrates strong project development potential for the company’s Queensland thermal coal assets.
The company acquired four tenements in the Eromanga Basin in South West Queensland in July 2011. In total the projects cover an extensive 2261 square kilometres
An independent geologist’s report released at the time set a total defined exploration target of between 6.6 billion tonnes and 18.7 billion tonnes of thermal coal.
Highlighting the potential of the newly acquired projects is the strategic location adjacent to East Energy Resources’ (ASX: EER) Blackall Coal Project and International Coal’s (ASX: ICX) South Blackall Project.
Now NSL has completed the analysis of additional coal quality data, coal seam thickness and depth and infrastructure ahead of the planned initial exploration drilling program.
Data from historical petroleum exploration wells drilled in close proximity to NSL’s four tenements has been utilised to establish the presence of thermal coal in the area.
Analysis of these boreholes by the Australian Coal Institute Research Laboratory indicates that there is potential for a thermal coal product from select working sections.
Based on historical drilling and data modelling by the independent geologist, NSL has been able to map out the contours of cumulative thickness of coal in some areas.
Results from one area indicate that coal seams are between 7 metres and 15 metres cumulative thickness.
Coal seam depth in that same area has also been analysed, with indications that the uppermost coal seams in the area are at shallow depths of less than 50 metres.
NSL’s coal projects are located 62 kilometres due east of Mount Morris in southwestern Queensland, with a railway line 34 kilometres south of the project area, continuing to the port in Brisbane.
Surrounding infrastructure includes rail and a major road, the Landsborough Highway, which runs north-south between the Capricorn Highway and the Warrego Highway.
The project area is bisected by the Charleville-Adavale Road.
Dual bulk commodity focus
At the same time as NSL is aggressively exploring its coal projects in Queensland, the company will also be targeting the commencement cash flows from its Indian iron ore operations.
This dual bulk commodity focus gives NSL the opportunity to link its maiden iron ore start-up operations and first revenues with its exploration and development of the Queensland thermal coal assets, given the shortage of electricity and power in the Indian domestic market and that country’s impending demand for thermal coal.