The concept study also found that the open cast operation could have a mine life in excess of 25 years.

Berenice-Cygnus, situated in the emerging Soutpansberg coalfield, is expected to produce both primary soft coking coal and secondary thermal coal product.

Universal said the concept study proved the Berenice-Cygnus project was viable at this stage of development.

Universal Coal chief executive officer Tony Weber said he was encouraged by the results.

“This project is strategically important to Universal given its position within the emerging Soutpansberg coking coal field and the quantum of available resource,” he said.

Universal has since kicked off the second phase of drilling at Berenice-Cygnus, with 12 holes drilled to date.

The drilling will assist in bringing the inferred and indicated resources within the open pit areas to a measured category.

To date, the tenement has a gross in situ resource of 1.3 billion tonnes.

The second phase of drilling is slated to be finished by the third quarter of 2012, with the third phase of drilling to follow.

Weber said Universal was undertaking further mine planning and logistical supply chain strategies in addition to starting preliminary identification of potential markets for the coal.

In April, Universal secured a $A12 million converting note facility from financial institution Susquehanna International Group.

Universal said it would inject approximately $3 million of the funds for continued drilling at Berenice-Cygnus.