Meanwhile, Australia Pacific Coal has secured a $5.5 million total funding package to progress its 100%-owned exploration programs at its Cooroorah, Carlo Creek and Dingo project areas in Queensland, its chief executive Paul Byrne said.
“We are pleased to note that Rio Tinto Exploration is advancing its exploration program on our Mt Hillalong JV projects,” he said.
“In addition to the airborne geophysical survey over the Hillalong project area in Queensland discussed in the June 2012 quarterly report, Rio are currently planning a five drill hole exploration program.”
Four of Australia Pacific Coal’s 22 exploration permits have been farmed out to Cuesta Coal subsidiary Blackwood Resources, whereby Australia Pacific Coal will retain a 10% free carried interest through to feasibility study.
The four Mt Hillalong tenements have been incorporated into an Exploration, Option and Joint Venture Agreement (EOJV) with Rio Tinto Exploration.
The initial payment of $2.3 million under the agreement has been received by Australia Pacific Coal.
The joint venture, over four prospective exploration permits covering 100km2 with a subsidiary of Rio Tinto, validates the quality of the acreage and highlights the significant potential of the permits, according to Byrne.
The 24-month transaction timetable for exercise of the first option will begin from the first entry onto Australia Pacific Coal tenement EPC 1824.
Under the joint venture, Rio Tinto Exploration has agreed to solely fund and manage a minimum expenditure of $700,000 exploration program in EPC 1824 to exercise its right to earn a 75% working interest.
Rio Tinto Exploration has entered into an agreement with UTS Geophysics to conduct an airborne geophysical survey over the Hillalong project area.
This agreement covers the flying and data processing of high-resolution fixed-wing airborne magnetic data. The objectives of the survey are to assist with the interpretation of continuity and structural features of the target coal seams in the Hillalong project.
Australia Pacific Coal is expected to begin initial site clearing and drilling on its Cooroorah project in early November.
Current year activities aim to advance the resource status of the tenement as a requirement for the Mineral Development Licence Application MDLA 453.
“The process has been assisted by the acquisition of additional recent exploration data, including the acquisition of data from five drill holes and three seismic lines that intersect the tenement,” Byrne said.