2nd Apr 2008 07:00
Churchill Mining plc02 April 2008 2 April 2008 CHURCHILL MINING PLC ("Churchill" or "the Company") Churchill acquires control of strategic new tenements abutting the East Kutai Coal Project, Indonesia. Highlights: • Churchill acquires control of an additional 200km(2) of coal tenements, immediately abutting the current drill area at the East Kutai Coal Project (EKCP) • Test drilling confirms EKCP seams run into new coal tenements • New area has potential to significantly increase Churchill's coal resource position • Vendor cash payment made from savings on original drilling budget Churchill Mining PLC is pleased to announce that it has acquired a 75% interestin an additional 200km(2) of coal tenements immediately abutting the westernboundary of the EKCP, and in particular, adjacent to the current area ofintensive drilling and resource calculation work being carried out by theCompany. The newly extended East Kutai Coal Project now covers an area ofapproximately 775km(2). Following on from geological observations by the Company that the coal seamscurrently being drilled at EKCP continued to the west, Churchill completedextensive technical and legal due diligence on the new area, including pilotdrilling to confirm the continuity of the coal seams into the new tenements. Interpretation of the coal seams currently being drilled in the coal resourcetarget area clearly show them crossing the western boundary of the block withthe lower coal package moving closer to the surface to the west, in particularthe number 14 seam, which is consistent in thickness. Due diligence drilling inthe new area has confirmed the geological interpretation with IR-001intersecting coal between 12.43-20.06 metres (at a depth of 7.63 metres) andIR-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 seamsmay also occur beneath the number 14 seam and these should extend into the newconcession area and become closer to the surface in the west. As these coalseams are merely extensions to the known coal seams, the quality of the coal isexpected to be the same as that presently being drilled. Churchill has completed an agreement with the vendors, the Investmine Group ofIndonesia, and has secured its 75% interest for an Indonesian Rupiah cashpayment equivalent to US$1.55 million and a possible future issue of 2 millionChurchill shares. The shares will only be issued should Churchill prove up aminimum JORC compliant 100Mt of measured coal resource. The vendor cash payment was paid from savings that Churchill has made on theoriginal exploration budget, due to the consistency of the coal seams beingdrilled. "It is a real win for Churchill that we have been able to obtain the very blocksonto which our current target coal seams extend," said Churchill's ManagingDirector, Paul G Mazak. "The acquisition of this strategic ground position is areal boost for Churchill given the soaring demand for thermal coal and thewhite-hot interest in Indonesian coal projects. The addition of these newtenements 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 SMGConsultants and an initial JORC resource statement is expected later this month. ENDS In accordance with the AIM Guidelines, Mr Brett Gunter, the Principal Consultantof PT GMT Services, is the qualified person that has reviewed the technicalinformation contained in this release. Brett Gunter has over 18 yearsexperience in the mining industry and is a member of the AusIMM. Enquiries: Churchill Mining Plc Blue Oar Securities Parkgreen CommunicationsManaging Director - Paul G. Mazak Romil Patel Justine Howarth+62 81510539186 / + 62 21 39832398 +44(0)20 7448 4000 +44 (0) 20 7851 7480 [email protected] Olly Cairns +61 (0)8 6430 1631 Notes to editors Churchill Mining Plc listed on AIM in April 2005. East Kutai Coal Project In May 2007 Churchill announced a sales agreement had been entered into topurchase a 75% interest in the East Kutai Coal Project from PT Techno CoalUtama. Churchill has now extended the size of the project by 200 squarekilometres by acquiring a 75% interest in the abutting tenements to the west ofEKCP from the Investmine Group of Indonesia. Exploration and resource drillingcontinue along with scoping and pre-feasibility work. Sendawar - CBM The Sendawar CBM project in Kalimantan, Indonesia, covers more than 800 squarekilometres of prospective ground and lies in close proximity to two operatingopen-cut coal mines. The project is located approximately 50km from the MahakamRiver. During Churchill's coal exploration programme, data collected during geophysicaland resitivity work, along with data collected from previous oil and gasexploration in the area, indicated that the area was highly prospective for CoalBed Methane. Churchill (70% of the CBM project) along with its Indonesianpartner RMU (30%) were granted Indonesia's first CBM JEA license in September2007. The CBM project has the potential to host Gas-in-Place of 5.6 trillioncubic feet. Churchill is currently conducting further studies on the CBMproject before starting detailed field work. South Woodie Woodie Given the increased prospectivity of South Woodie Woodie and Churchill'sincreasing focus on its Indonesian coal and coal bed methane projects, theCompany sold 80% of the project to Australian company Spitfire Resources Limited("Spitfire"). Spitfire, which listed on the ASX on the 12th December 2007, has the option topurchase the remaining equity in the project but must spend AUD$1.5 million onexploration. Aside from its large shareholding in Spitfire, Churchill alsoretains a price-indexed mining royalty over the South Woodie Woodie project. The South Woodie Woodie project covers approximately 490 square kilometres (witha further 899 square kilometres under application) in the East Pilbara region ofWestern Australia, and sits approximately 400km southeast of Port Hedland in thehighly prospective Pilbara manganese province. Spitfire has identified multipledrill targets and shall begin its new drill programme shortly. In March 08 Spitfire announced that it had secured the strategic support of thediversified Norwegian-based industrial, trading and metals & alloys group,Tinfos AS ("Tinfos"), as its new major shareholder via a share placement. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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