Release: Churchill acquires new tenements abutting the East Kutai coal project

(02 April 2008)--UK firm Churchill Mining PLC announced that it has acquired a 75 percent interest in an additional 200km? of coal tenements immediately abutting the western boundary of the East Kutai Coal Project (EKCP), and in particular, adjacent to the current area of intensive drilling and resource calculation work being carried out by the Company. The newly extended EKCP now covers an area of approximately 775km?.

Following on from geological observations by the Company that the coal seams currently being drilled at EKCP continued to the west, Churchill completed extensive technical and legal due diligence on the new area, including pilot drilling to confirm the continuity of the coal seams into the new tenements.

Interpretation of the coal seams currently being drilled in the coal resource target area clearly show them crossing the western boundary of the block with the lower coal package moving closer to the surface to the west, in particular the number 14 seam, which is consistent in thickness. Due diligence drilling in the new area has confirmed the geological interpretation with IR-001 intersecting coal between 12.43-20.06 metres (at a depth of 7.63 metres) and IR-002 between 17.85-25.90 metres (at a depth of 8.05 metres).

Moreover, there is an indication from the current drilling that additional seams may also occur beneath the number 14 seam and these should extend into the new concession area and become closer to the surface in the west. As these coal seams are merely extensions to the known coal seams, the quality of the coal is expected to be the same as that presently being drilled.

Churchill has completed an agreement with the vendors, the Investmine Group of Indonesia, and has secured its 75% interest for an Indonesian Rupiah cash payment equivalent to US$1.55 million and a possible future issue of 2 million Churchill shares. The shares will only be issued should Churchill prove up a minimum JORC compliant 100Mt of measured coal resource.

The vendor cash payment was paid from savings that Churchill has made on the original exploration budget, due to the consistency of the coal seams being drilled.

?It is a real win for Churchill that we have been able to obtain the very blocks onto which our current target coal seams extend,? said Churchill?s Managing Director, Paul G Mazak. ?The acquisition of this strategic ground position is a real boost for Churchill given the soaring demand for thermal coal and the white-hot interest in Indonesian coal projects. The addition of these new tenements has the potential over time to double Churchill?s resource target, which currently sits at 500Mt.?

Churchill?s EKCP drilling and exploration data is being modeled by SMG Consultants and an initial JORC resource statement is expected later this month. (end of release)