Bowen Coking Coal (ASX: BCB) has rewarded the faith of investors with a significant expansion of its resource estimate for its fully-owned Cooroorah Project in Queensland’s Bowen Basin.
Drilling on its Mammoth seam within the project has added a maiden resource estimate of 37 million tonnes.
That boosts the total Cooroorah resource estimate by 23 per cent to 154 Mt, with further infill drilling set to increase confidence in the resource and move more of it from inferred to indicated.
Since listing on the ASX, Bowen Coking Coal has set itself aggressive targets to add value by boosting JORC resources and today’s announcement is a clear sign that its strategy is producing results.
JORC compliance refers to the mining industry’s code for reporting exploration results, mineral resources and ore reserves, managed by the Australasian Joint Ore Reserves Committee.
Good quality coal with further tests coming soon
Early indications are that the thick Mammoth seam hold superior quality coal compared to the lower seams, with further detailed coal quality and washability tests underway and expected to be released to the market in coming weeks.
Bowen Coking Coal chief executive Gerhard Redelinghuys said the he was “extremely satisfied’’ with the result of the exploration program so far.
Risky exploration pays off
“Drilling in an underexplored area is always high risk, but it definitely paid off for BCB’s shareholders with the delineation of 37Mt of high quality Metallurgical coal in the Mammoth seam,’’ said Mr Redelinghuys.
“We are now planning the next exploration program to increase our confidence in the resource to a level which would support a Pre-feasibility study on Cooroorah,’’ he said.
Coking coal demand and prices rising
The maiden resource for pure-play coking coal company BCC has come at a great time with demand for high quality coking coal from the Chinese and Indian steel mills in particular very strong as global steel production continues to expand.
That has led to strong coking coal prices around the US$200 a tonne mark, with steel mills particularly keen to get more coal from Queensland’s Bowen Basin, which is regarded by many as producing the world’s finest coal feedstock for making steel.
The Bowen Basin also has the benefit of excellent seaborne freight routes to Indian and China and low levels of ash and other impurities, which is becoming more important as air pollution in China and India becomes more of an issue.
Bowen Coking Coal is one of very few pure-play coking companies and its fully owned Bowen Basin projects include Cooroorah, Comet Ridge and Hillalong.
It also has a joint venture interest with Stanmore Coal in the Lilyvale and Mackenzie projects and has shown itself to be a keen acquirer of coking coal assets.