Challenger reports Tabang coal project preliminary results

Canadian junior coal exploration firm Challenger Deep Resources Corp. announced on Thursday preliminary results from the Phase I exploration of its 100%-owned Tabang, East Kalimantan coal project.

The Phase I exploration program consisted of geologic mapping, outcrop sampling, trenching as well as the excavation of test pits. Work completed to date covers approximately 55% of the Tabang project area and was focused on the north and central portion of the property.

Completion of the Phase I program is currently in progress.

Through its exploration to date, Challenger has discovered 56 coal outcrops. Challenger?s preliminary interpretation of the discovered outcropping coal is that at least eight separate seams are evident in the northern half of the property. The width and number of seams cannot be confirmed until initial drilling operations have been completed. The seams appear to be shallow dipping (10 to 20 degrees).

Based on the sample analysis performed, coal quality in the discovered seams is in the 5,000 - 6,000 kcal/kg (AR) range. This quality of coal is highly marketable, the company said.

Completion of the Phase I program will include outcrop mapping of the remainder of the property, excavation of test pits to fully expose foot wall and hanging wall of coal seams and interpretation of results. A scout drill program will commence immediately in this overall program and will include at least 1,000m of drilling in 25 to 30 holes designed to test the quality, continuity, width and number of coal seams at depth.

The company said it was very encouraged by the initial exploration results on the Tabang coal project and ?is one step further in its business plan of acquiring and developing numerous coal projects in Indonesia as a precursor to achieving commercial production?.

The company also said to have commenced due diligence on several other acquisition opportunities in the area and will provide updates accordingly.?

The 2,900ha Tabang Project is located in the Tabang district, Regency of Kutai Kartanegara. The project area is accessible by vehicle with well established logging roads and is situated in close proximity to the Belayan River, a major tributary of the Mahakam which in turn is the coal transport route to Muara Jawa, the anchorage point for mother vessels and export to market. The river has the capacity to handle 230 foot (3,500 tonnes) barges from projected port facilities. (alex)