The New South Wales-based company first intersected the new seam – which has been named the Clareval Seam – in December 2005, some 200m below the Weismantel Coal Member. A borehole intersected 7m of bright coal and five subsequent boreholes drilled over a 300m strike length confirmed coal continuity with low ash coking coal properties.

The company said the drilling implied a resource of 360,000t with a less than 3.5:1 strip ratio. Should the seam prove viable production synergies could be realised with two opencut mines, Gloucester said.

The company’s next step is to delineate the extent of the Clareval Seam to the south of the original exploration area through a drilling program over the next two months.

Additional drilling is also proposed on the eastern side of the Gloucester Basin to establish the expected existence of the Clareval Seam parallel to the known 4km strike length on the eastern flank.

The company said the next stage of exploration should allow it to quantify potential resources in the Clareval Seam.

“This is an exciting find for Gloucester Coal,” the company said. “The company continues to identify economic coal adjacent to its existing operations, which will provide low strip ratio coal resources for opencut operations beyond 2020.”

The Duralie mine produced 852,000t during the six months to December 2005 with 20Mt mineable reserves left at that time.