The Federal Government will fund a feasibility study into a $3 billion project to build a freight rail link between Melbourne and Brisbane. A modern standard gauge rail link would pass through the region in which the Ashford project is located.

NEC’s chief executive officer Keith Barker said the establishment of such a rail link into Brisbane from the Ashford region would enhance the prospects for the development of any coal resource in southern Queensland.

“A new standard gauge railway would be expected to offer increased capacity and efficiency when compared with the existing rail network servicing southern Queensland,” he said.

The study will look at where to locate the railway, with the potential development of an export coal project in the Ashford region a possibly influence.

“There are a number of options available to Ashford which will be evaluated in a feasibility study but the Inland Railway project is likely to offer significant benefits,” Barker said.

Drilling at Ashford is scheduled to commence in early May, with the immediate activity planned in the vicinity of the previous opencut operations of the old Ashford mine within an area explored by previous tenement holders. The immediate objective is to verify the existing data to determine a resource base for the project.

NEC bought a 50% interest in the Ashford Projects from Renison Bell Holdings in February 2005. NEC has the right to acquire a further 25% for 5 million shares following expenditure of a minimum of $A1 million, including completion of a bankable feasibility study, within three years.