Challenger Deep updates E. Kalimantan coal projects
Saturday, May 14 2011 - 02:32 AM WIB
Tabang Project
Exploration of the Tabang Project to date has included mapping, outcrop sampling, test pitting and drilling. 14 drill holes have been completed to the end of March, 2011 for a total of 521m. A summary of the most recent test-pit sampling results and results of the drill program to date are provided below. The drill holes were located in a broad traverse cross-cutting the outcropping coal seams to understand the structure, stratigraphy and confirm coal quality. The holes were drilled to depths of 25 ? 50 metres.
Initial Drilling Results indicate the following:
* Multiple seams (7).
* Seams are flat dipping (10-20 degrees).
* Coal quality from drilling confirms previous test pitting and outcrop sampling results
All test pit and drill samples were processed by SGS Coal Laboratories, Samarinda, East Kalimantan. Industry standard Quality Control and Quality Assurance protocols were employed in the sample acquisition, preparation and analysis procedures.
Exploration and drilling teams are currently conducting further operations on the Tabang property.
Current ongoing exploration includes:
* Grid drilling at 400m centres to expand the known area of coal and to futher delineate structural/ lithological controls and define seam geometry within and outside the area of outcropping coal.
* Continued test pitting and mapping to delineate additional coal seams and further define known seams.
Tabang Regional Exploration
Additional prospects within the Tabang general area are being assessed as part of Challenger's strategy to expand the present land holdings to include coal resource potential from Ujoh Bilang, Batu Ayau and Balikpapan formations (upper, lower and middle). The former to provide higher coal quality and the latter to provide tonnes of low strip coal. The ultimate goal is to establish a blending operation in order to maximize returns by combining coal of different quality whilst minimizing overall mining costs.
PT Prapatan Prima Coal (PPC) Project
As previously reported, Challenger has an exclusive option, in the form of Memorandum of Understanding, to enter into a Conditional Share Purchase Agreement relating to the private Indonesian company which holds the IUP Exploration Permit for the PPC project.
The 2,994ha PPC Project immediately adjoins the northern boundary of the property hosting the Berau Coal operations, in the Lati area. Berau Coal is one one of the largest coal operations in Indonesia with production of 14.4 million tonnes in 2010.
Due diligence reconnaisance mapping has been completed by Challenger and it has been decided to extend the program with the drilling of 100m deep holes to test previously reported intersections and the possible extension of coal seams from the adjacent Berau Coal mining operations.
This program has commenced and will initially consist of 5 drill holes. Drilling equipment is on the property and actual drilling operations will commence once locations have been prepared. The drilling program will continue if the initial holes are successful.
Outcrop and scout drill data data provided by the IUP Exploration Permit holder indicates the presence of at least 4 coal seams. The average cumulative thickness from the drill data is 11.7m from 3 seams with maximum widths of individual seams of around 4m. Challenger's drill program is intended to confirm this information.
The target for the PPC Project is coal with a low strip ratio, GCV(adb) of 5,600-6,000 kcal/kg with very low sulfur.
In order to permit its ongoing investigations, Challenger has negotiated a 45 day extension to the existing MOU which will allow it to enter into the final Conditional Share Purchase Agreement on or before June 6, 2011.
Commenting on the programs today, Mr.Ranjeet Sundher, President and CEO of Challenger stated: "We are very pleased with the initial drill results on the Tabang Project as verification of the results of our initial due diligence. We have been working steadily on the regulatory process of obtaining an IUP Exploration Permit for this project and have received all preliminary approvals for the permit and for our drill program and expect that the actual issuance of the IUP permit will be imminent. Drilling operations are presently ongoing and a more extensive drill program is planned in contemplation of receiving this key regulatory element of the project." Referring to the PPC Project he continued: "Bringing this project to the drilling stage is very exciting given its proximity to producing coal operations. The fact that the PPC Project has an IUP Exploration Permit has meant that we could advance to the drilling stage much quicker than would otherwise have been possible." (romel)