Release: Churchill: Drilling update - East Kutai coal project

(17 October 2007)--Exploration and drilling continues successfully at Churchill’s East Kutai Coal Project (EKCP) – Kalimantan, .

 

Total metres drilled since the commencement of the programme is 3,891m. To date, 36 holes have been drilled with the most recent bore holes, having a spacing of between 750m and 1000m between centres. Current target seams for a JORC compliant resource are all dipping at less than 10 degrees and drilling rates will increase when infill block-drilling begins.

 

To date over 250 coal outcrops have been mapped on the EKCP with coal thicknesses ranging up to more than 20 metres in outcrop. Mapping will continue as the drilling proceeds to assist in seam correlations and define further extensions to the coal-bearing stratigraphy.

 

The average coal quality parameters to date are as follows (on an ADB basis):

Inherent Moisture	Ash	Volatile Matter	Fixed Carbon	Total Sulphur	Calorific Value
(%)	(%)	(%)	(%)	(%)	(Kcal/kg)
16.55	4.50	43.50	35.00	0.17	5,300

 

The Company believes that based on current project findings, it does not appear that the coal will require drying before it can be exported.

 

Churchill expects the first coal volume calculations in January 2008 and will provide a more detailed report to the market at that time.

 

All exploration camps and facilities are in place and the Company now has a field team of over 100 personnel, including; drilling contractor staff, 12 geologists, community liaison and local development officers, logistical support and locally sourced non-skilled personnel working on the project.

 

In May 2007, Churchill entered into a formal sales agreement with PT Techno Coal Utama Prima, to buy 75% of the project. Churchill has now fully completed the transaction and has taken control of the EKCP for the initial payment of US$250,000 and a final payment of US$750,000, which included the tenement expansion for the areas known as Block RTM and Block RTP.

 

No Churchill shares were issued as part of the consideration for the EKCP.

 

The Company maintains an active sourcing programme for coal exploration and mining opportunities in both and elsewhere and will continue to examine more projects throughout 2008. (end of release)