Pan Asia updates Indonesian coal projects

The following is an edited excerpt from Australian mining firm Pan Asia Corporation on Indonesian coal projects, taken from the Company?s Update on Innovation West Acquisition report, which published on Wednesday.

SUMMARY OF IMPROVED PORTFOLIO:

Production ? Thermal Coal, East Kalimantan

Nadvara (?NAD?) - profit share
? Current production of 1.5 Mt per annum.
? Gross Calorific Value of 5,300 - 5,500 kcal / kg (adb).
? Excellent location, with haulage road, stockyard and loading jetty.
? JORC reserve and resource of 25.5 Mt with additional potential.

Development - Thermal Coal, East Kalimantan

Perdama Maju Utama (?PMU?) ? profit share
? Target production of 1.2 Mt per annum, expected to commence in late 2010.
? Gross Calorific Value of 5,500 - 5,800 kcal / kg (adb).
? 36 holes drilled.
? Initial Exploration Target of 30-40 Mt.

Development - Thermal Coal, South Kalimantan

Transcoal Minergy (?TCM?) - 75% interest
? Target production of 1 Mt per annum from open pit in 2011.
? Target production of 1.5 Mt per annum from underground in 2012.
? Gross Calorific Value of 6,300 ? 7,100+ kcal / kg (adb).
? Initial exploration target of 20-3OMt, with maiden JORC resource imminent.
? 19,790 Ha with coal outcrops up to 15 m thick.
? Gross Calorific Value of 6,300-6,800 kcal / kg (adb).
? 27 holes drilled - exploration target of 50-70 Mt.

BCKP and Surya Ibrahim (BCKP & SIM) projects, East Kalimantan

The BCKP & SIM projects are adjacent to each other and cover 19,790 Ha in East Kalimantan. The Project area contains coal outcrops mapped on surface and a total of 27 holes have been drilled indicating seam thickness varying from 0.6m to 4.2m, and with Gross Calorific Value typically 6,300- 6,800 kcal/kg (adb). The exploration target for these projects is 50-70 Mt.

Samudera Hindia Jaya and Ratu Ayu (?SHJ & RA?), E. Kalimantan - 50% interest
? 6,508 Ha adjacent to large tonnage concessions.
? Gross Calorific Value of 5,400-5,600 kcal / kg (adb).
? Exploration target of 20-30 Mt.

Nusantara Minera Pratama (?NMP?), E. Kalimantan - 90% interest
? 3,177 Ha with coal outcrop identified over 6 km of strike length.
? Gross Calorific Value of 5,300-5,600 kcal / kg (adb).
? Exploration target of 20-30 Mt.

The NMP project covers 3,177 Ha in East Kalimantan, which has recently been surveyed by the Company?s geological consultants. This survey identified coal outcrops spanning some 6 km of strike length with seams up to 2 m in thickness.

Based on preliminary work, an initial Exploration Target of 20-30 Mt is expected, with the potential to increase as drilling is undertaken. The NMP concession is very well located near the coast, and is adjacent to an 8 Mt per annum thermal coal mine at Kaltim Prima?s Bengalon concession and close to the 1.5 Mt per annum Perkasa Inakakerta operating coal mine. Technical due diligence is complete on this project but there are trailing legal due diligence items to be completed.

Project Pipeline
The upgraded asset portfolio includes projects held by respected Indonesian mining professional Honardy Boentario. Under the agreement with Boentario, Innovation West Pty Ltd. (IW) also has the right to obtain a 50% interest in two other additional significant coal projects and a pre-emptive right over a third significant coal project.

Marketing Rights
Off-take rights for production from NAD, PMU, BCKP & SIM and SHJ & RA.

The Company has been carrying out a thorough legal due diligence of the assets with the assistance of the respected Indonesian law firm, Christian Teo & Associates. Based on the preliminary results of this process and active negotiation with the Indonesian parties, the Company has reconfirmed its intention to acquire IW with the signing of an updated Binding Heads of Agreement (the ?Agreement?). This Agreement covers an upgraded package of assets which the due diligence process indicates is significantly improved relative to previous packages considered, offering more robust ownership title over highly prospective assets. At the same time, the consideration payable for the acquisition of IW continues to be 630,000,000 fully paid ordinary shares and 25,000,000 performance shares under the terms set out in the announcement made to shareholders on 19 January 2010. (end of edited excerpt)