Bowen Coking Coal (BCB.AX) seems to be determined to increase the current resource of 43 million tonnes on its Hillalong coking coal project in Australia as the company has kicked off a new exploration program which will consist of seismic exploration and a drill program.
A total of 11 holes are currently planned to be drilled; three holes will be drilled in the northern area to extend the resource at the Rangal coal zone, while an additional eight holes will be drilled in the southern area of the project.
Although the Australian coking coal industry is suffering from the Chinese import ban, Bowen Coking Coal should not have any issues as its joint venture partner is the Japanese group Sumitomo Corporation. Sumitomo already earned an initial 10% stake in the project by completing an A$2.5M investment in the Phase 1 exploration activities and is now currently completing an additional A$5M exploration program to earn a 20% stake in the project.
With Sumitomo funding the Hillalong exploration, Bowen Coking Coal can focus on its Broadmeadow East coking coal project (which will also produce some thermal coal as a by-product) where it has outlined a total resource of 33 million tonnes. This resource includes 10.6 million tonnes in the measured and indicated resource categories with approximately 8.3 million tonnes located within 100 meters from surface. Breadmaedow was acquired from Peabody in the summer of last year for a cash payment of just A$1M (and ongoing royalties of A$1/t coking coal, capped at A$1.5M in total).
Disclosure: The author has no position in Bowen Coking Coal. Please read our disclaimer.