NEC is proving up the resource in joint venture with Japanese trading house Sojitz, which is kicking in $A5.3 million for the exploration and evaluation program, and which has farm-in rights to earn up to a 30% interest.

“Confirmation of this initial substantial resource at Yamala, coupled with the thermal coal project at Elimatta [NEC 100%] and our two hard coking coal projects at Maryborough [NEC 100%] and Ashford [NEC 50%], confirms Northern Energy as an emerging multi-project coal development company,” NEC managing director Keith Barker said.

The initial drilling program, at a cost of $1 million, has converted 40–50% of the previously identified target to a 190Mt inferred resource and has also confirmed an additional exploration target of 220–260Mt.

The resource estimate includes NEC’s recent drilling results in the company’s Yamala geological model.

Barker said initial quality results indicated low raw ash coal with potential for a semi-soft metallurgical coal fraction in the washed product mix together with export thermal coal.

“The results also show potential for opencut mining, prior to underground mining which will apply to the bulk of the resource, given shallow cover close to the sub-crop,” he said.

Drilling and geophysical exploration programs are scheduled to recommence at Yamala in the September quarter.

Northern Energy were trading up 5.8% early this afternoon at 90 cents.