The results of the study confirm the company holds significant coal assets with the potential for development into substantial mining operations, managing director Andrew Dash said.

“The study identifies the potential of Carbon Energy’s coal assets and provides a sound basis to proceed with the next phase of project assessment,” he said.

Additionally, the study estimates total production cost at $81 per tonne free on board to Gladstone.

The independent conceptual mining study was commissioned as part of Carbon Energy’s strategic review to identify the best approach to maximise the value of its coal deposits and to determine which packages would be suitable for open cut or underground mining.

The study identified three mining areas with a target working section of 4.5m. Production was staged to produce an average of 12.5Mtpa ROM coal for over 35 years.

Additional coal is available outside the working seam section at all sites.

Optimisation of the working section and the use of non-conventional extraction techniques such as longwall top caving) which could extract greater than 4.5m of the seam, would improve resource recovery and reduce unit costs, the study found.

These optimisations and opportunities will be explored in subsequent studies, according to Carbon Energy.

The company aims to upgrade its substantial coal resources through a modest program of exploration drilling incorporating coal quality and washability testing.

The company has previously reported a JORC inferred resource of 1.4 billion tonnes across its 1400km.sq of exploration permits for coal EPC in Queensland’s world-class Surat Basin coal precinct.

Carbon Energy plans on utilising the funds generated from monetising its coal assets to further develop its core business of providing underground coal gasification technology and services.

The study uses a coal-handling and preparation plant yield of 78% to achieve an export thermal product. The yield is based on typical results for producing Surat Basin mines when mining the whole Macalister Seam thickness.

The ability to target an optimal 4.5m working section is likely to enhance the yield achieved from these projects and will be an area for future optimisation studies.

The report highlights favourable mine locations, with two of the three sites unaffected by strategic cropping land (SCL). One contains a partial overlap and will require further assessment.

The report also identifies an additional two longwall mining areas that are not sufficiently defined for scoping at this stage. As further data becomes available, the company will progress studies into the additional sites identified, it said.