Challenger announces Tabang Project exploration results

Calgary-based coal exploration firm Challenger Deep Resources Corp. on Wednesday provided an exploration update on the Pelangi property, one of the four properties in the company's Tabang Coal Project located in East Kalimantan.

The Pelangi Mining license is in the "Local Announcement" stage with the IUP Exploration permit currently in process.

The property covers an area of approximately 4,000 hectares and is located approximately 10km south of Challenger's ATRP property. The project covers the Balikpapan formation which is prospective for coal in the quality range of CV 4,000 - 6,000 Kcal/kg (Adb) and is known to host large resources of coal in the general Tabang area.

The phase 1 program of mapping, outcrop/test pit sampling and analysis has been completed. This program is the precursor to a phase 2 drilling program which will commence upon granting of the IUP Exploration permit and other permitting as required. In the interim, work will continue on geological interptretation and drill hole planning.

Up to the end of October, 2011, exploration has resulted in the discovery of 32 coal outcrops representing multiple seams in two separate zones with the main area of coal outcrop containing multiple seams covering an area of 5 x 2km. The coal seams are generally flat dippping an average angle of 10 degrees to south and southeast. The thickness of the seams varies from 0.15 - greater than 6.0 meters.

A total of 27 samples were collected and analysed from outcropping coal and 6 test pits. Coal quality indicates middle to upper Balikpapan formation.

Challenger's Tabang Project encompasses four properties, ATRP and Pelangi which are under the terms of Conditional Sale and Purchase Agreements (CSPAs) and two properties under exclusive MOUs. ATRP received the first IUP Exploration permit and accordingly is the first property to have been drilled. Challenger is preparing for the IUP Mining license on ATRP and will commence drilling on Pelangi once the IUP Exploration permit has been issued for that property. CSPAs for the two other Tabang Project properties are being prepared.

It is Challenger's intention to begin mining operations on the ATRP property first utilizing a local short-haul road and jetty facilities to be constructed. As the other Tabang Project properties are advanced, the intention is to link all properties with a common haul road and to construct a larger jetty and loading facility further down-river from ATRP.(alex)