The report established an exploration target of 25-100Mt of coal and “compelling evidence” for a significant deposit of high-grade coal with metallurgical potential in a seam with a true average thickness of 25m.

The resource estimate was determined by a 6000m drilling campaign completed last May as well as geological mapping, trenching, induced polarisation and resistivity surveys.

Draig managing director Mark Earley said the resource result was an “excellent achievement”, particularly after only one exploration drilling program at the site.

“We now have a significant coal resource at Teeg, our resources are at open pit mineable levels and we have identified large drill target areas to pursue,” he said.

“[W]e are firmly in the semi soft coking coal area and we are excited about the potential coal quality of Teeg improving through coal washing. “

Most of the intercepts made during the drill program were relatively shallow but were in the most complex part of the deposit, due to geological forces pushing the coal seam close to the surface at a steep dip.

Results of interpretation work to date indicate that the coal deposit extends down dip as a series of alternating synclines and anticlines and is open-ended in that direction. The more expansive resource to the north east is less affected by these forces and is expected to flatten out.

Draig Resources is a Mongolia-focused coal explorer developing eight licences in the country’s provinces of Ovorhangay and South Gobi provinces.

The company plans to undertake drilling on its South Gobi licences this year to assess its broader coal portfolio.