Sunshine said it has started drilling the Polaris 2 core hole and is coring ahead at 66m.
The initial Polaris CSM project includes up to 12 core holes and pilot wells in the highly productive Walloon Coal Measures fairway.
The drilling program is designed to confirm net coal, gas content, permeability and productivity of the Juandah and Taroom coal seams that make up the Walloon Coal Measures, the company said.
Following initial drilling, Sunshine will rapidly implement a production-testing program to identify commercial reserves in the permit.
Sunshine owns 100% of the ATP 768P.