The Queensland government awarded Stanmore Exploration Permit for Coal 1769, directly south of the Kerlong project’s existing EPC 1552.

While this increased the project’s total permit area by 80%, Stanmore expects to win even more acreage directly west of the expanded project.

The company said it had received “priority applicant status” for its Exploration Permit for Coal Application 2176, and expected the area to be granted within six months.

Stanmore said the area in EPC 1769 was a shallower updip extension of the existing Kerlong coal targets, but it expected EPCA 2176 to host even shallower coal seams.

“Kerlong is a prospective underground coking coal project and the increase in project area via EPC 1769 and pending grant of EPCA 2176 will add significant size to the Kerlong project and increase the potential for coal at shallower depths,” Stanmore managing director Nick Jorss said.

The main target is the Leichardt seam, or a lucrative split of this seam.

This seam is targeted by Vale’s Carborough Downs mine and Ellensfield longwall project, while it also factors into the proposed northern underground expansion of Macarthur Coal’s Moorvale mine.

The nearby Moorvale, Coppabella and Burton open cut mines already significantly mine this seam, which can vary from 4-11 metres thick and can produce a low ash coking coal product along with a medium ash (10-20%) pulverised coal injection coal product.

Stanmore plans to start a significant exploration program at Kerlong this month.

Once this is underway the explorer expects to have a total of 7 rigs drilling across its project portfolio.

The Kerlong project is surrounded by mines and projects within a 15km radius due to the Rangal Coal Measures in the region.

Stanmore shares are up 1c to $1.17 this morning.