This one interests me as I remember Toni Poli from Eagl;e Mining...

This one interests me as I remember Toni Poli from Eagl;e Mining days. What's important I think is the coal resource. I hear that a large miner with nearby holdings is interested in doing a deal with AQA to market their coal for them. As I'm not really up on coal I'd be interested to hear what experts think of the resource as described.

AnnaP

AQUILA RESOURCES LIMITED 2002-10-31 ASX-SIGNAL-G

HOMEX - Perth

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COAL

Exploration test drilling was carried out in three of the coal
permits during the Quarter. A total of 21 holes were drilled for
2,371 metres and 88 samples were collected for preliminary coal
analysis. Downhole geophysical logging was carried out where hole
conditions permitted.

ARCTURUS:

The drilling on Arcturus was confined to the southeastern sector of
the permit where coal seams at relatively shallow depths had been
reported previously. Eleven holes were drilled for a total of 983
metres and the results integrated with those obtained on Departmental
programmes.

The drilling has outlined a coal deposit that is comprised of up to
four seams. The best developed of which shows good consistency over a
strike of 3.5km. The intersected thickness of this seam varies from
2.5 to 7.0 metres over a depth range of 17.5 to 64.0 metres to the
seam roof. Dips vary from 1 to 3 degrees.

The preliminary analytical results of the raw coal samples indicate
similar analysis results as those reported for the departmental core
holes in the area. It appears to be a high volatile bituminous coal
with a moderate to high ash content. Swelling tests indicate that no
coking fraction is present. Composite samples of coal plies from the
one core hole drilled on this program have been submitted for
washability testwork.

The coal deposit occurs on the western flank of a northwest trending
anticline. Erosion of the Rangal Coal Measures is evident along the
anticlinal axis, which appears to have formed a structural high
during the outpouring of the Tertiary basalt. The drilling has traced
this structure for a further 10km into the permit. Thickening of the
coal seams appears to occur on the flanks of the structural high.
Repetitions of the coal deposit could exist at shallow depths along
the structure presenting new exploration targets for future drill
testing.

A follow up programme of slim core drilling is planned to better
delineate the deposit and to collect representative samples of the
seams for quality testing.

KINGPOWER:

The drilling done at Kingower consisted of three holes being
completed for a total of 543 metres. The program encountered
difficult drilling conditions which prevented the recovery of clean
samples from the coal bearing sequences. Core holes will be required
on future programs to overcome these contamination problems.

The full suite of coal seams that characterize the upper portion of
the German Creek Formation was encountered by the drilling. Little
structural disruption is evident and there is good correlation of
seams between the holes despite the wide spacing. The German Creek
Seam is split into two seams, the lowermost of which appears to
thicken up dip from the 1970's Departmental holes and to the west.
From east to west the holes intersected the seam at depths of 176,
162 and 150 metres respectively.

Thick Tertiary cover effectively masks the Permian coal bearing
strata over much of the permit area. It does thin to the west,
decreasing from 139 metres in the east to 86 metres in the most
westerly hole. The basalt component also thins out to the west and is
replaced by sand and clay. The thickness of the cover would appear to
restrict opportunities for the development of open pit mining
operations to the western sector of the permit.

MORANBAH EAST:

Seven holes were drilled at Moranbah East, for a total of 845 metres,
targeting the Rangal Coal Measures.

The drilling shows that the Rangal Coal Measures contain two major
coal seams. The uppermost, or Leichhardt Seam, is best developed in
the northern sub-blocks. The seam thins and splits to the south and
is not readily recognised in the drill holes there.

The lowermost, or Vermont Seam, which occurs near the base of the
Coal Measures, was intersected in all seven holes. Below these is a
mixed sequence of coal and ash that forms the Girrah Seam of the
underlying Burngrove Formation. Interpretation of the down hole
geophysical logs will be required to better define the Vermont Seam
and characterize the individual plies.

GOLD

WILCHERRY HILL:

Drilling was carried out at the Cato, Mawson and Torrens prospects
during the quarter. A total of 960 metres was drilled, 633 metres of
reverse circulation (RC) and 327 metres of diamond core.

Two new exploration licenses were granted to Aquila. Lake Gilles (EL
3020) covers a strong regional gravity high with associated magnetic
anomalism. Eurilla Dam (EL 3021) covers the eastern contact zone of
the Wilcherry Hill granite complex. The compilation of previous
exploration results together with an assessment of the regional data
sets will be undertaken prior to the commencement of fieldwork on the
tenements.

CATO:

A diamond core tail was drilled from CAT 006 to follow up on the gold
mineralised intersection recorded in CAT 005 of 14 metres at 0.9 g/t
gold from 70 metres. The hole intersected granite gneiss and
amphibolite with discrete zones of biotite alteration, but no
mineralisation. The results indicate that the gold mineralisation in
this setting occurs in shallow north plunging shoots and needs to be
followed up along the trend of the plunge.

MAWSON:

Hole number MAW 001 was extended from 100 metres and diamond core
drilled to 288 metres. It intersected red-rock (hematite) altered
granite gneiss and amphibolite before finishing in albitised
quartzite. The source of the coincident gravity and magnetic anomaly
was not explained. It could be at a deeper level than reached since
the depth range that was modelled of 200 to 400 metres was not fully
tested. It was decided not to extend MAW 002 at this time but to
reassess the situation when a better understanding of the geological
setting is established.

CORPORATE

LEGAL PROCEEDINGS:

* Background

Aquila has initiated and has been successful in its application
against Pasminco and MIM for access to documents relating to the
circumstances surrounding the extension of MIM's right of pre-emption
in respect of Pasminco's interest in the Ernest Henry Mine, which
Aquila had contracted to purchase in January 2001.

Based upon the discovery of documents already provided to Aquila,
Aquila has determined that it has a cause of action against Pasminco,
and on 24 July 2002, lodged a final proof of debt for $153,715,872
with the administrators of Pasminco. The amount claimed represents
Aquila's assessment of its damages arising from the termination of
its agreement to acquire Pasminco's 49% interest in EHM.

* Current

In addition to seeking orders for the inspection of documents from
MIM and Pasminco which have been masked for relevance and in some
cases privilege, Aquila had also been seeking orders that Credit
Suisse First Boston hand over all of the documents in its possession
relating to its role as financial and corporate adviser to Pasminco
in the transaction.

The additional documents that Aquila is seeking to discover will
assist the Company in determining whether it has a cause of action
against MIM (in addition to Pasminco itself). A decision as to
whether proceedings will be initiated against MIM will be made once
this process has been completed.

For further information please contact:-

Mr Tony Poli
EXECUTIVE CHAIRMAN
Telephone: (08) 9474 3311
Facsimile: (08) 9474 4433
Email address: [email protected]
Visit us at: www.aquilaresources.com.au