Despite the challenging market conditions, MetroCoal believes its exploration program will add value to the Bundi project and be accommodated comfortably within the company’s cash reserves, leaving a balance at year’s end in excess of $7 million.

“Coal market commentators continue to forecast strong growth in coal demand driven in particular by India and China,” the company said.

“This strong growth should provide the platform for a price recovery and progressing our projects will allow MetroCoal to take advantage of the upturn.”

Discussions are continuing with potential joint venture partners in China and India on the Bundi project. The program of work is expected to increase knowledge and confidence of key attributes of the underground project.

The drilling program consists of 10 bore holes within the resource target area collecting geological, coal quality, gas and geotechnical data. There are two monitoring bores for groundwater sampling and monitoring.

The mining lease application is planned to be lodged in late 2013 followed by the Project EIS in the first half 2014.

The Bundi project area is in the northern part of EPC1164. It includes several sub blocks from the adjoining EPC1251 and EPC1609.

The Juandah project area is also in EPC1164, adjacent to the southeast corner of the Bundi project.

The proposed Bundi mining area is focused on the down dip extensions of the Kogan and Macalister coal seams, immediately south of Glencore Xstrata’s proposed Wandoan open cut mine development and New Hope Coal’s proposed Elimatta Mine.