The thermal coal project is adjacent to the ATA open cut mine and underground development could start from a highwall.
Detailed in a recent investor presentation, Pan Asia has set an exploration target of 53-70Mt at the project, while it already holds 22.4Mt of indicated and 30.8Mt of inferred resources.
Pre-development open cut mining is targeting 1Mtpa in 2011, and while Pan Asia said it had already signed memorandums of understanding agreements with underground coal companies, these were not disclosed.
Four seams dip underground in the 4148 hectare project area, while the energy value of the produced coal is estimated reach 6500-6800 kilocalories per kilogram on air-dried basis.
Total capital and operating expenditures before longwall mining are expected to total $US150 million.
Targeting a mine life of 15 to 20 years, the product coal is expected to fetch a price of more than $80 a tonne free-on-board, going by market prices for the coal from the nearby ATA mine.
Pan Asia owns 75% of the TCM project and its shares closed up 24.1% to 33.5c on Friday, also on the back of progress with other coal projects.