Churchill reports further coal intercepts at the East Kutai project

London Stock Exchange-listed mining firm Churchill Mining Plc announced Wednesday that its due diligence drill programme at the East Kutai coal project in Kalimantan, Indonesia, has continued to intersect occurrences of thermal coal in multiple seams.

The company said it had drilled a further nine holes, seven of which intersected coal seams (greater than or equal to 0.5 metres in thickness). Best intercepts included 14.2 metres, the company said.

Churchill has now drilled 19 holes at East Kutai, 15 of which have intercepted coal seams ranging from 0.5m to 19.25m in thickness.

The drilling programme at East Kutai is being conducted as part of verification work being undertaken by Churchill designed to test the quality and continuity of coal outcrop targets identified in field work by the Company?s consulting groups PT Rimineco Geological and Mining Services and GMT Indonesia.

As a result of the positive results from the verification programme, Churchill has entered into a formal sales agreement with the owners of the East Kutai project, PT Techno Coal Utama Prima, to buy 75% of the project. Churchill has made an initial payment of US$250,000. Churchill will pay a maximum of an additional US$750,000 for the project, which includes any tenement expansion to the project currently being considered by the Company. This deal is expected to be finalised on or before 90 days, the company said.

The East Kutai project area covers approximately 399 square kilometres, made up of two blocks, and is situated 110 kilometres northwest of the main population centre of Sangatta in the Regency of East Kutai. (alex)