East Energy Resources has acquired the rights to two coal tenements in the Bowen Basin and Adavale Basin in Queensland. The Norwich Park tenement is an exploration phase project with identified coal material in the western portion of the block. Coal measures are being mined adjacent to the tenement area and further data review, exploration and drilling is required to assess the area. The Blackall tenement includes a potential quantity of thermal coal measures which have been defined by a limited number of drill holes (Figure 1).

The Norwich Park project lies immediately to the west of the Norwich Park Mine and extends west to Capella. It covers the lower part of the Bowen Basin sediments and has potential for Class I and Class ll coal deposits. The Saraji - Norwich Park – German Creek mines are Class lll coals in an overlying unit.

LOCATION AND TENURE

The Norwich Park project area extends from Dysart in the north east to Capella in the west and lies adjacent to the Norwich Park operating mines and the German Creek Formation. The area is secured by EPC 1066 of 266 blocks or 803 square kilometres. The tenement was granted on 26 February 2007. Rail Infrastructure exists at Dysart and extends through the eastern part of the tenement (Figure 2).

GEOLOGICAL DISTRIBUTION OF COAL IN THE BOWEN BASIN

Queensland coals range in age from Carboniferous, 350 million years (Ma) in age, to Tertiary (65 Ma). The commercially significant black coals are restricted to deposits within sedimentary basins of Permian (280 Ma), Triassic (250 Ma) and Jurassic (200 Ma) age, located mainly in the central and eastern portions of the state.

The most important Permian coal basin is the Bowen Basin, which is exposed in a large, triangular-shaped area of central Queensland, 600km long and up to 250km wide. The basin extends south in the sub-surface beneath Mesozoic sediments of the Surat Basin, and connects with the Gunnedah and Sydney Basins in New South Wales.

Coal seams in the Bowen Basin exhibit major variations in rank and quality, reflecting both the depositional and tectonic history of the basin. A broad trend of increasing rank from west to east has long been recognised, and was used as a guide for coal exploration targets during the late 1950s and early 1960s.
Along the structurally disturbed north-eastern edge of the Bowen Basin, the coals range in rank from anthracite to low volatile bituminous, and deposits tend to exhibit a complex structure. Coals in the central part of the basin are medium to high volatile bituminous and include the best coking coals. Structural deformation in these deposits is generally relatively mild.

In the southwest, the coal rank falls below the coking range with a consequent loss of coking properties. The more significant deposits in this region are usually low ash non-coking coals and generally are not affected by major structural deformation apart from normal faulting. The westerly decrease in rank continues across the Springsure Shelf and into the Galilee Basin.

PROPOSED EXPLORATION

The proposed exploration budget at Norwich Park is focused on data review and field examination to identify coal measures and targets of the Class l and Class ll type similar to the Rugby deposit, particularly in the Capella Area. Near surface resources of good quality thermal coal have been delineated in the Capella area by other companies though no Group I coal seams have been mined to date.

The program will include 4,500 metres of RC drilling and 3,000 metres of cored drilling in year 1 and 7,000 metres of RC drilling and 3,500 metres of cored drilling in year 2.

LOCATION AND TENURE

The Backall Project is secured by tenement EPC 1149 covering 300 sub blocks or approximately 900 square kilometres. The tenement is currently at application stage.

The area is 65 kilometres south of Blackall township, 177 kilometres north west of Charleville, and 81 kilometres west of Tambo. Blackall is 1,050 kilometres from Brisbane via the Warrego and Landsborough Highways and is 734 kilometres by rail from Gladstone via Rockhampton, Emerald and Jericho. The spur line from Jericho extends to Yaraka 160 kilometres west of Blackall (Figure 3).

The topography consists of gently sloping smooth plains, which are partly dissected by tributaries of the Hope and Ravensbourne Creeks. These flow intermittently and only during the wet season in to the Barcoo River System to the north. Elevations vary from 329 metres in the south to 278 metres in the north.

GEOLOGICAL DISTRIBUTION OF COAL IN THE ADAVALE BASIN

The Blackall Project lies in the Adavale Basin which is contiguous with the Surat Basin within the Great Artesian Basin. The Cretaceous Mackunda Formation has been mapped on the eastern boundary of the project area and extends westerly to Carlow homestead. It is covered in part by Quaternary sediments. Mackunda Formation sediments were not recognised during the 1974 exploratory drilling program.

The Winton Formation crops out over most of the project area. It is sparsely overlain by Quaternary alluvium along creek beds. The maximum known thickness (incomplete) of the Winton Formation is 305 metres and consists of sandstones, siltstones and claystones with same coal seams.

Two coal seam horizons about 20 metres apart have been recognised. The Upper seam contains up to 22 metres of coal, carbonaceous shale, bands of mudstone, siltstone, and minor sandstone. The Lower seam contains much thinner seams and is about 13 metres at its thickest. Coal so far encountered in this horizon is only minor.

Where penetrated, the top seam horizon was located within 20 metres of the surface except in Hole C005 where the seam horizon is overlain by 27 metres of sandstone. Stratigraphically, the coal appears to be near the base of the Winton Formation. In the north west of the project area the Winton Formation thickens over the Lorne Depression and the seam horizons are much deeper.

PROPOSED EXPORATION

EPC 1149 is currently under application however once granted infill drilling is required to confirm coal quality and continuity. The historical exploration results are located mostly on the North West flank of the Carlow Anticline. The economic potential in the North West and west of the project area has not been tested. Further drilling is aimed at proving up a coal resources in accordance with the JORC code and extending the prospective areas on the North West limbs of the Carlow and Hope Creek Anticlines. A significant drilling programme is proposed, including 1,500 metres of chip drilling and 500 metres of 52mm coring in years
1 and 2.

Scout drilling is proposed for the East West seismic line which intersects the axes of the Hope Creek and Carlow Anticlines in the south of the project area. Exploration work on the southern boundary of the project area on the North West flank of the Hope Creek.

In the North West section of the project area the coal seam horizons may be too deep over the Lorne Depression to be of economic significance. However, as the Winton Formation thickens to the North West some scout drilling is warranted to test for an upper sequence of coal seam horizons.