London (Platts)--23Jan2013/823 am EST/1323 GMT

New Age Exploration Limited (NAE) has started first-phase drilling at its 100%-owned Lochinvar coking coal project near Carlisle on the Scottish and English border, the emerging Australian coking coal producer said Wednesday.

The drilling began after NAE completed a contract with British Drilling and Freezing Ltd. for a five-hole program with the option of a sixth hole, and site preparation was carried out. The company also signed land access agreements for five drill holes and completed seismic re-interpretations of historical data.

It said in a statement that the seismic reinterpretation results are being included in planning of the drilling program and will be used as a basis for the resource modeling.

NAE said it will undertake a full coal quality analysis, including washability and preliminary coking tests, from drill core upon completion of each hole.

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The first borehole and analysis results are expected late in the first quarter, with Phase 1a completion and its JORC Resource update in early Q3, and Phase 1b completed and its JORC resource update expected in early Q4.

"The initial drilling (Phase 1a) will provide an understanding of the size and quality of the coal contained within the western part of the Lochinvar project down to depths of 600 metres," NAE managing director Gary Fietz said in the statement.

The company acquired the project in June 2012, its first coal acquisition outside of Colombia. The project is part of the Canonbie coal field discovered in the 1950s by the National Coal Board and has an exploration target of 330 million-410 million mt.

--Jacqueline Holman, jacqueline_holman@platts.com
--Edited by Jonathan Fox, jonathan_fox@platts.com

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