The company increased the total JORC-compliant resource at the project to 83.4Mt, with the main focus of the project, the Leichhardt seam, grown by some 22% to 46.7Mt.

Based on the latest resource, the seam – which is between 60m and 360m deep, and 1.5-3.5m thick – could host a 3-4Mtpa longwall mine.

Coal quality assessment work done by Aquila so far suggests the coal is medium volatile, which could produce a primary product of low to moderate ash and low sulfur. The seam could also potentially produce some metallurgical coal.

An additional seam at Red Hill, Vermont, has an inferred resource of 36.7Mt.

SMG Consultants, which prepared the resource statement, said the area could also potentially host an additional 72.5Mt of coal resources, although this target requires additional drilling to bring it up to JORC-compliant status.

Red Hill is 45 kilometres north of Aquila’s Isaac Plains coal mine and next door to the BHP Billiton Mitsubishi Alliance Goonyella operations.

Any coal produced at the operation would be exported through the Abbott Point coal terminal.

Shares in Perth-based Aquila were last traded at $3.23, down 1c this morning.