Talwood’s revised resource follows drilling that has given Aquila a more robust geological model with a clearer definition of the mining domains of the upper seams and a better understanding of seam thickness and coal quality, the company said in a statement this morning.

Talwood, formerly known as the Red Hill Coal Project, now has three target seams: the Leichhardt and Vermon from the Rangal coal measures and the Middle Goonyella from the Moranbah coal measures.

“The company has determined that the target seams, while continuous throughout the tenement have distinct mining domains, based on mining thickness and quality,” Aquila said.

“The Leichhardt seam at its shallowest is at a depth of 50 metres and dips at about 1 in 10 throughout much of the tenement.”

The tenement is adjacent to, immediately east of and down dip from the BMA Goonyella Riverside and Peabody North Goonyella mining operations.

There has also been an improvement in JORC classification of the resource status from 23.8 million tonnes indicated and 59.6Mt inferred to 137.1Mt indicated and 109.4Mt inferred.

Recent work has involved drilling an additional 62 holes across the tenement, with 21 cored holes, and the identification of mining domains from the target seams based on coal thickness and quality.

Coal quality investigations which highlighted the various properties of the upper two seams have been carried out by the company, and the addition of 21 cored bores, with both raw and clean coal results, have been processed since the previous resource statement was released.

Four holes have drilled through the Moranbah coal measures and confirmed the continuation of a 5m thick Middle Goonyella seam.

Yields for the Leichhardt seam peak at 78% for a combined coking and thermal product (F1.50 at 9.9% ash) and average 63.6% (F1.50 at 10.9% ash), and yields for the Vermont seam peak at 65% for a combined coking and thermal product (F1.50 at 10.4% ash) and average 48.5% (F1.50 at 11.9% ash).

The company expects resource definition will continue to improve reported tonnages and, following further exploration, the reserves will be assessed with a view to developing an underground longwall mining operation.

A prefeasibility study is expected in the third quarter of 2011.