Challenger updates Tabang Coal Project

Indonesia-focused Canadian coal exploration firm Challenger Deep Resources Corp. reported on Tuesday on the continuous development of its Tabang thermal coal project in East Kalimantan .

The Tabang Project consists of two exploration licenses (ATRP and Pelangi) representing an area of 5,610 hectares with two additional license acquisitions under negotiation which could potentially add an additional 7,540 hectares.

The Tabang Project strategy is to establish a mineable resource of varying coal quality to support a blending operation utilizing common Challenger owned infrastructure, the company said.

An update on the exploration of the ATRP property, the first of the Tabang Project properties to be issued an IUP Exploration Permit, is provided below.

ATRP Property
Exploration activity completed to the end of August on the 100% owned ATRP property includes the completion of coal outcrop mapping of the entire property, further test pitting and scout drilling. To date, 59 outcrops have been found and 63 test pits completed to expose the coal seams.

To date a total of 105 drill holes for 3,026m of open hole have been completed and 45.8m of touch coring drilling were completed to establish the broad continuity of seams. Spacing was mostly on a 400m grid with a closer grid pattern of 100m and 200m in selected areas.

Drilling, outcrop mapping and test pitting has established 7 continuous seams over an area of approximately 6 x 4km in a broad syn-form structure.

Coal Quality
The latest drilling and test pitting, since the last results were reported (May 13/11) continue to return coal quality data similar to that which was previously reported.

Average coal quality based on all assayed samples to date is as follows:

	TM	IM	Ash	VM	FC	TS	GCV
ATRP	%,AR	%,ADB	%,ADB	%,ADB	%,ADB	%,ADB	(Kcal/Kg)
							ADB
Min	8.79	6.07	1.18	33.89	22.71	0.15	5,577
Max	24.34	16.92	21.05	60.68	47.42	0.35	7,090
Average	19.00	12.53	4.36	45.99	37.12	0.23	6,385

Based on exploration data to date, using coal outcrop, test pitting and drill hole intersections, Challenger intends to proceed with an application for an IUP Operation-Production permit which will position the Company to initiate production assuming the necessary permits and pre-production studies are received and support that activity.

The Company has not yet commissioned an NI 43-101 compliant resource calculation and accordingly cannot confirm the existence of a mineable resource at this time. The preliminary estimations and results to date have encouraged the Company to undertake a number of initiatives which will be implemented in the coming months to further advance the ATRP property and Challenger's overall Tabang Project strategy.

IUP Operation Production
Processing of the ATRP IUP Operation-Production will commence in September/October. This process is expected take up to 6 months and will include an Environmental Assessment and Pre Feasibility Study.

Infrastructure Permits
Permit processing for key infrastructure including haul road, jetty and stockpile required for the transport and loading of coal for the Tabang Project is to commence September/October.

Mining Economics
The key characteristics of the ATRP coal which the Company believes will enable economic extraction include: flat dipping seams, soft overburden, extensive continuity of seams and high quality of coal.

The ARTP seams are relatively thin which is typical of the Batu Ayau formation however, the Company is of the view that the above characteristics will combine to enable the potential economic extraction of coal from this property.

Continued Tabang Project Development
The Company's Pelangi property, located approximately 10km south of the ATRP property, is in the process of obtaining an IUP Exploration permit which will allow for further drilling. Two additional potential acquisitions have been identified within the Tabang Project area and are under evaluation and negotiation.

Challenger will continue with further drilling on the ATRP property, including deeper exploration drilling, while the status of the Pelangi IUP Exploration permit is progressed and the other potential acquisitions are pursued which would then position Challenger to commence drilling operations on those properties.

Commenting on the Company's progress to date, Ranjeet Sundher, President and CEO of Challenger, stated: "We are very pleased with the continuous progress on the ATRP property specifically and with the development of the Company's broader Tabang Project area strategy. Our confidence in the coal quality and volumes discovered to date have resulted in our efforts to expand our project area land holdings and to initiate an aggressive campaign to develop these resources and to pursue the various regulatory approvals required to support this development. In addition to developing the Tabang Project, Challenger is actively reviewing other exploration and production acquisition opportunities." (alex)