The present method of coal reserve estimation used at the Callide Coalfields lacks the ability to quantify its reliability. Geostatistics posseses (sic) this ability. It was decided by the mine management to have a trial implementation of geostatistics to test the reliability of exploration drilling. The trial demonstrated that geostatistics could provide a meaningful model of the coal deposit and quantify the errors associated with this model. Also some drill hole sampling methods were found to be inadequate when used in conjunction with a chemical analysis.