A program of five drillholes – including drill coring in-seam to conduct sampling for coal quality purposes, field mapping and ground magnetics – is expected to begin in early July.

In August 2011, AusPac Coal’s wholly owned subsidiary Area Coal completed an exploration, option and JV agreement with RTE, which sets outs the terms of the JV for the company’s Mt Hillalong project.

The JV covers four prospective exploration permits over 100sq.km and, according to AusPac Coal, validates the quality of the acreage and highlights the significant potential of the exploration tenements.

The 24-month transaction timetable for exercise of the first option will commence from first entry onto AusPac Coal tenement EPC 1824.

An initial payment of $2.3 million under the agreement has been received by AusPac Coal.

Under the JV, RTE has agreed to solely fund and manage a minimum expenditure of $700,000 for the exploration program in EPC 1824 to exercise its right to earn a 75% working interest.