Pan Asia reports S. Kalimantan coal project drilling activity

(17 September 2010)--The Directors of Pan Asia Corporation Ltd are very pleased to provide the following update on drilling activities at the TCM coal project located in South Kalimantan.

Following on from the completion of the successful initial 12 hole programme, four additional drill holes have been completed as part of the phase 2 programme. These four holes, TCM 13, TCM 14, TCM 15 and TCM 16, have all returned significant intersections of coal.

TCM 13 returned a total of six coal intersections over the length of the hole, with a cumulative thickness of 4.86m. TCM 14 intersected a total four coal seams over the length of the hole, with a cumulative thickness of 5.40m. TCM 15 intersected a total four coal seams over the length of the hole, with a cumulative thickness of 5.30m. TCM 16 intersected a total nine coal seams over the length of the hole, with a cumulative thickness of 7.26m.

The next two holes of the phase 2 drilling will be infill drilling to the south and will include testing to obtain geotechnical, hydrological & gas information to strengthen the geological model as a precursor to mine planning. Thereafter, phase 3 drilling is planned to look at the north- western and eastern extensions of the seams, drilling on a controlled pattern that facilitates additional resource modelling.

The drilling in the northwest would also provide a platform to assess additional potential for open pit operations, as well as underground mining based on the thick, high quality coal seams present in this area. The north western drilling will employ the same exploration drilling techniques to locate the down-dip position of the coal seams exposed in adjacent open pits in the same manner as was successfully undertaken in the southern area.

All drilling, logging and sampling has been undertaken in accordance with industry best practice and in consideration of the JORC guidelines. All drill holes are vertical and utilise a mixture of HQ diameter open hole and triple tube coring. Coal samples are being sent to PT. Intertek Utama Laboratory Services in Banjarbaru, Kalimantan. PT. Intertek Utama is a fully internationally accredited coal testing laboratory.

Coal quality analysis has been received for sampled intervals in TCM 13, TCM 14 and TCM 15, and is listed in Table 2. Calorific value data returned from the latest analysis confirms that the coal can be classified as bituminous thermal coal. The upper seam contains higher sulphur; however the lower seams have returned lower sulphur values. It is therefore possible these two coals could be blended to produce a high quality coal with low-moderate sulphur values.

Laboratory analysis indicates high quality bituminous thermal coal, Calorific Value (CV) up to 7,046 cal/g. (end of edited release)