Challenger receives Tabang Project IUP Permit

Canadian junior firm Challenger Deep Resources Corp. announced Wednesday that the mining business licence, or IUP Exploration Permit, for its Tabang coal property in East Kalimantan has been granted.

The IUP Permit has been granted for an area totalling 2,960 hectares on Challenger's 100% owned Tabang project.

This IUP permit gives the rights to the holder to carry out full coal exploration activities within the concession area for a period of three years until May 13, 2014, which may be extended if required. This permit also gives the rights to obtain a coal exploitation license (IUP Operation-Production) if the prospect proves to be economical for commercial production.

On approval of a mine feasibility study, the Company will be able to transition the IUP into the exploitation stage under an IUP Operation - Production, with the right to conduct mining production on this property for 20 years, with the potential for two further ten-year extension periods.

Challenger's work on the Tabang project to date has confirmed the presence of at least seven flat-dipping seams of CVC(adb) 5,500 - 6,500 kcal/kg coal. All of the coal seams discovered to date are located on the northern half of the property. Challenger's exploration team is currently conducting more extensive surface exploration of the southern half of the property.

Challenger's initial reconnaissance drilling program confirmed coal quality and the coal seam orientation and consistency on the Tabang program with 14 shallow holes (25 - 50 metres) for a total of 521 metres of drilling.

Challenger has now commenced a more extensive exploration drilling program of the previously discovered multiple coal seams upon the issuance of this IUP.

Challenger plans to conduct an environmental assessment and a pre-feasibility study later this year as part of the prerequisites for the application to obtain the IUP Operation - Production (coal mining production) license.

The company also said that it is negotiating the acquisition of additional prospects within the Tabang general area as part of its strategy to expand the present landholdings to include coal resource potential from the Ujoh Bilang, Batu Ayau and Balikpapan formations (upper, lower and middle). ?Challenger's goal is to establish a significant land portion in the Tabang area to support a blending operation to maximize returns by combining coal of different quality whilst minimizing overall mining costs,? it said.(alex)