Churchill Mining raises fund to expand E. Kalimantan coal reserves

UK coal mining firm Churchill Mining announced on Wednesday it has it has raised ?10,000,000 by the issue of 20,000,000 new Ordinary Shares at 50p per share.

The company said the proceed from the placing would be used to carry out extensive exploration and drilling program, pre-feasibility and feasibility studies at its East Kutai coal concession and to fund joint evaluation studies at the Sendawar CBM project. Both projects are located in East Kalimantan.

Managing Director Paul Mazak said the decision to raise funds was made following encouraging results from the first 4,000 metres of the initial 10,000 metre programme at the East Kutai Coal Project. ?This has lead the Churchill directors to seek additional funds to, in particular, upgrade the current drilling programme from its current target to as much as 65,000 metres, with the aim of defining a JORC compliant mining reserve of 100 million tonnes of coal by the end of 2008 with an additional 400 million tonnes of resource for continued drilling and upgrading,? he said.

?Assuming that the targeted mining reserve is reached by the end of 2008,? continued. Mazak, ?then Churchill should be in a position to advise a mine development schedule thereafter.?

Churchill has 75 percent stake at East Kutai Coal Project.

The company also said it and partner PT. Ridlatama Mining Utama, will spend the first half of 2008 completing a joint evaluation study in order to assess the potential of CBM at Sendawar following the award of Indonesia?s first CBM joint evaluation agreement (JEA) licence to the partnership. If the study is positive, the company will look to convert the JEA into a Production Sharing Contract, it said. (alex)