A Vancouver-based junior exploration company that discovered coal in its search for Saskatchewan diamonds began re-drilling its discovery holes Monday.

Goldsource Mines Inc. announced in April it had found coal — 27 metres deep in one hole and 34 metres deep in the second — while drilling for kimberlite about 50 kilometres north of the town of Hudson Bay, in the east-central part of the province.

"So that's about an eight- or nine-storey building [in depth]," company president Scott Drever told CBC News in an interview.

Goldsource's shares soared on the news it may have discovered a whole new coal basin in the province. The price rose from 37 cents in late April to nearly $20 by June, levelling off at about $14 per share this week.

Since the discovery, the company applied for and received 176 permits from the province to explore for coal in the region. The permits are good for a year, with two possible six-month extensions, and they can be converted into 15-year leases.

During the next two months, the company plans to re-drill the two discovery holes to confirm the initial findings, as well as drill seven new holes to see whether the coal extends farther.

An independent company, Norwest Corporation, will "be present for initial drilling to inspect coal intercepts, establish coal sampling and handling protocols, quality assurance and control and set up a standardized coal logging system," a Goldsource news release said.

The samples will then be sent to Loring Labs in Calgary for analysis based on Norwest’s recommendations, it said.

With the price of coal on the rise, Drever said if this deposit pans out it may be more valuable to the company than the diamonds they were originally searching for.

Residents of nearby Hudson Bay, which has relied on the forestry industry until its recent downturn, have been a little skeptical about all the coal hype, said Dave Ferguson, the town's economic development officer.

But after Goldsource held a community meeting and explained its findings, local interest picked up, he said.

"It has the potential to be huge," Ferguson said. "I mean there hasn't been a major coal find in the last 40, 50 years in North America. And this one here — they're very excited and they're slowly starting to drag us along, and get us excited."

Coal is currently mined only in southern Saskatchewan, around Estevan and Coronach. The province consumes most of the coal produced, using it to generate electricity.