The study has demonstrated that the coal project has attractive development potential for an open cut operation with an estimated mine life of more than 10 years.

Carabella will now move into a feasibility phase, scheduled for completion by the end of the year.

The phase will include further drilling for resource and reserve delineation, detailed engineering for coal processing, securing infrastructure access including rail and port capacity and engaging with key contractors.

The company will also seek funding during this phase.

The concept study predicted average saleable tonnes of about 1 million tonnes per annum and an operating expenditure of $96 per produced tonne and an initial capital expenditure of $32.5 million.

“The study indicates attractive economics and upside potential under a range of market scenarios, notwithstanding the current difficult coal market conditions,” Carabella managing director Anthony Quin said.

“Particular strengths of the project include the high quality of the ultra-low volatile PCI coal, low capex and competitive operating costs and close proximity to key infrastructure.”

Carabella has already defined a maiden resource of 18.2Mt comprising 6.6Mt of indicated resources and 11.6Mt of inferred resources.

In addition to these estimates, an exploration target in the range 5-33Mt has been identified as a result of exploration activities.

The mine plan envisages contractor mining utilising truck and excavator equipment, with coal to be railed to the Port of Gladstone for sale and delivery into export markets.

“Carabella will now advance the project into a feasibility study phase,” the company said.

“Subject to the outcomes of that process, we envisage commencement of mining activities in H1 2014.”

Carabella is in the process of seeking environmental approvals with mining lease application and environmental authority applications already lodged and environmental baseline studies likely to be completed late next quarter.

The company holds interests in a portfolio of 10 coal exploration tenements covering a substantial exploration area of approximately 4400sq.km across Queensland's coal basins.

The company's current focus is on development of the flagship Grosvenor West hard coking coal project near Moranbah and the Bluff PCI project.