The Ulaan operation is located in the South Gobi region of Mongolia, approximately 100km north of the Chinese border and survey results revealed the project could be home to a significant coking coal deposit.

The survey identified multiple, flat lying, gently folded reflectors within 150-200m thick strata that is considered to have high coal-bearing potential.

South Gobi is a significant coking coal region and Newera’s project is about 115km south of the 6 billion tonne Tavan Tolgoi coking coal mine and 150km west of the Oyu Tolgoi copper mine.

“In terms of a first-pass seismic survey for the Ulaan Tolgoi project, the outcome of the survey represents an almost startlingly good result,” Newera chairman Martin Blakeman said.

Blakeman said while seismics was an “imprecise science” and the results were yet to be proven, initial results suggested there was the potential for a number of “very large” deposits within the project.

“The discovery and development of the 6 billion-plus tonne Tavan Tolgoi coking coal mine provides encouragement that other yet-to-be-discovered, very large coking coal deposits may be lurking in the basin under thin cover,” he said.

“We would like to think that as a consequence of the exceptional interpretive results of our seismic survey within Ulaan Tolgoi, that Newera has every chance of discovering the next big deposit within the South Gobi Basin.”

The company said it was starting preparation for a drilling program in early 2014 and the campaign would be able to provide a definitive test of the interpretations.