Sydney, Australia, Dec 10, 2012 - (ABN Newswire) - Cuesta Coal Limited (ASX:CQC.AX - News) is pleased to announce a resource upgrade at the Moorlands Deposit (EPC1738) located at the company's 100% owned West Bowen Project in the Western Bowen Basin, Queensland (See Figure 1).
The company can also confirm previously unrecognised satellite targets have been identified to the west of the Moorlands Deposit, further adding to the appeal of the potential scale of the project.
Upgraded Resource Estimate
A total resource of 53.4Mt is estimated for the contained coal within the Moorlands Deposit (EPC 1738).
Of the 53.4Mt, 14.6Mt is Measured, 9.7Mt is Indicated and 29.1Mt is Inferred resource. This represents an increase of over 35% on the existing 39.5Mt JORC Resource and over the course of the year, an increase in the resource of over 95% from the original 27.3Mt JORC Inferred Resource reported in the Prospectus.
The estimate of coal Resource for EPC 1738, as presented in this report, has been prepared in accordance with the guidelines of the Australasian Code for the Reporting of Mineral Resources and Ore Reserves, prepared by the Joint Ore Reserves Committee of the Australasian Institute of Mining and Metallurgy, Australasian Institute of Geoscientists and Minerals Council of Australia, December 2004.
The Resource has been cut-off to a depth of 250 metres and a minimum seam thickness of 0.3 metres. The majority of the resource is less than 150m from the surface and importantly, for Cuesta's plans to transition from explorer to developer, encouraging stripping ratios of between 4:1 and 6:1 have been defined in the open cut target.
The Resource Estimate includes recently concluded drilling by Cuesta of 18 open holes and 6 core holes (100mm) totalling 3,212m of drilling, 19 open PCD holes in drilling conducted in 2011, and historical drilling in the area undertaken by CRA Pty Ltd, Pacific Coal Pty Ltd and Rio Tinto Exploration Pty Ltd. The full resource statement for the Moorlands Deposit can be seen in Tables 1, 2, 3.
Future Work Planned for Moorlands Deposit
The success in defining a Measured and Indicated Resource in the open cut target area in the north of the Deposit allows Cuesta to commence a mine scoping study. The Company expects this to occur in Q1 2013.
Coal samples have been retained from the 2012 drilling activities to enable coal washability testing and other specific testing such as HGI to be completed over the coming months.
In 2013, closely spaced step out drilling will occur on the project to identify the possibility of expanding the boundary of the Resource and infill drilling will occur to enable marketable reserves to be generated in the lead up to fast tracking the project into production.
Details of the 2013 exploration activities will be released to shareholders in Q1 2013.
Satellite Gravity Targets
Cuesta, during the recent drilling campaign, identified that a promising satellite target exists in the North West corner of EPC 1738, as shown in figure 1. Internally Cuesta has placed a 0 - 50 Mt exploration target on these greenfield projects.
Cuesta aims to complete scout holes to test the potential for coal measures in this target area in 2013. If coal is encountered it has the potential to greatly enhance future project economics.
This satellite target area has been defined through a combination of geophysical assessments where a distinct gravity low exists and Permian outcropping is present.
Cuesta Coal's Managing Director, Matt Crawford said: "We are delighted to announce a further 35% increase in our JORC Resource at Moorlands. The scale of Moorlands continues to grow and it is shaping up as a significant project for Cuesta. It's a credit to our technical team that we have discovered these thick coal seams where previous exploration activity in the 1970's and 1980's failed to identify them.
"The Board and management team have always highlighted this deposit as a priority target for the company due to its ability to be fast tracked into production. The thick seams, favourable strip ratios and close proximity to surface enable the company to produce early cash flows as a small scale, low cost thermal coal operation.
"We are particularly encouraged by the potential of our 2013 drilling program to expand the existing resource and the recent identification of satellite targets to enhance the projects economics. We look forward to updating shareholders on future developments."
About the West Bowen Project
The West Bowen Coal Project stretches over an area of 1,000km2 and is located 25km West of Clermont, Queensland. It consist of EPC 1738 and 1891 and EPCA 2008, which sit in close proximity to the Rio Tinto Blair Athol Open Cut Coal Mine which has operated since 1984 and produced up to 12Mt of thermal coal per annum.
Cuesta's Measured, Indicated and Inferred Mineral Resource of 53.4 Mt in accordance with the JORC code (2004) guidelines is located within EPC 1738, known as the Moorlands Deposit. This resource is contained within a discrete Permian sub-basin situated approximately 14km northwest from the Blair Athol Mine.
Cuesta is conducting detailed geological desktop assessments to identify additional coal bearing targets to the Moorlands Deposit, primarily in EPC 1891 with an aim to conduct scout drilling in 2013.
Management Performance Shares
The West Bowen Project resource calculation of 53.4 Mt of JORC Measured, Indicated and Inferred Resource satisfies the condition precedent for the issue of the Series One Shares under the executive share and option plan (EXSOP) as detailed on page 174 of the replacement prospectus dated the 6th of March 2012. Pursuant to the terms of the EXSOP, 10,000,000 fully paid ordinary shares and 3,333,333 unlisted options (exercisable at 25cents, expiry date 31 December 2015) will be issued to the relevant Director's in the respective proportions.
The securities issued are subject to an escrow period which is 24 months from the date of the initial quotation of the Company's fully paid ordinary shares on the official list of the ASX. The full terms and conditions of the EXSOP are available as a pre-quotation disclosure (released 2 May 2012) on the Company's ASX announcement platform.
About Cuesta Coal Limited:
Cuesta Coal Limited (ASX:CQC.AX - News) listed on the Australian Stock Exchange on the 4th of May 2012 raising $20 million to find an aggressive 2 year exploration, mine scoping and feasibility study program on four key project areas in the Queensland Coal Basins.
Cuesta has assembled a diverse portfolio of thermal and coking coal exploration prospects within the Bowen, Surat and Galilee basins, the company's core projects are well situated geographically with over 11,000km2 of exploration ground in total.
Cuesta's balanced portfolio consists of a pipeline of projects ranging from advanced exploration requiring resource definition drilling, to conceptual opportunities requiring scout drilling. The projects are located in close proximity to current and future planned infrastructure.
Cuesta Coal Limited T: +61-2-9284-5900 F: +61-2-9284-5999 E: email@example.com WWW: www.cuestacoal.com.au
Cuesta Coal Limited
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