Jan 21 2011
Challenger Deep Resources Corp. (TSX VENTURE:CDE) announces preliminary results from the Phase I exploration of its 100% Tabang, East Kalimantan coal project.
The Phase I exploration program consisted of geologic mapping, outcrop sampling, trenching as well as the excavation of test pits. Work completed to date covers approximately 55% of the Tabang project area and was focused on the north and central portion of the property. Completion of the Phase I program is currently in progress.
Through its exploration to date, Challenger has discovered 56 coal outcrops. Challenger's preliminary interpretation of the discovered outcropping coal is that at least eight separate seams are evident in the northern half of the property. The width and number of seams cannot be confirmed until initial drilling operations have been completed. The seams appear to be shallow dipping (10 to 20 degrees). Each coal seam was sampled and all samples were submitted for analysis by Pt Geoservices Coal Laboratory, East Kalimantan. All test pit samples were processed by SGS Coal Laboratories, Samarinda, East Kalimantan. Industry standard Quality Control and Quality Assurance protocols were employed in the sample acquisition, preparation and analysis procedures.
Based on the sample analysis performed, coal quality in the discovered seams is in the 5,000 - 6,000 Kcal/kg (AR) range. This quality of coal is highly marketable. Details of the representative coal seam samples are set out below:
Completion of the Phase I program will include outcrop mapping of the remainder of the property, excavation of test pits to fully expose foot wall and hanging wall of coal seams and interpretation of results. A scout drill program will commence immediately in this overall program and will include at least 1,000m of drilling in 25 to 30 holes designed to test the quality, continuity, width and number of coal seams at depth.
Mr. Ranjeet Sundher, President of Challenger, stated, "I am very encouraged by the initial exploration results on the Tabang coal project. The extent of coal outcrops discovered and the quality of the coal looks very promising. Challenger is one step further in its business plan of acquiring and developing numerous coal projects in Indonesia as a precursor to achieving commercial production. Based on the success of our recent program, Challenger has commenced due diligence on several other acquisition opportunities in this area and will provide updates accordingly."
The 2,900ha Tabang Project is located in the Tabang district, Regency of Kutai Kartanegara, East Kalimantan, Indonesia.
The project area is accessible by vehicle with well established logging roads and is situated in close proximity to the Belayan River, a major tributary of the Mahakam which in turn is the coal transport route to Muara Jawa, the anchorage point for mother vessels and export to market. This river has the capacity to handle 230 foot (3,500 tonnes) barges from projected port facilities.
Coal operations in the area currently use the Belayan River as a transportation highway for commercial coal production.
The Tabang Project area covers both the Batuayau and Ujoh Bilang geological formations. The typical coal quality of the Ujoh Bilang and Batuayau Formations from producing coal mines in the region is CV 5,500 – 6,000 Kcal/Kg (ADB) with coal seam thicknesses varying from 0.5 – 6 meters.
Private Placement
Challenger is also pleased to announce a non-brokered private placement of up to $2,100,000 (the "Private Placement").
Pursuant to the Private Placement, which is subject to regulatory acceptance by the TSX Venture Exchange, Challenger intends to issue, pursuant to applicable exemptions from registration and prospectus requirements of Canadian and United States securities laws, up to 2,800,000 units ("Units") at a price of Cdn. $0.75 per Unit, each Unit comprising one (1) common share of Challenger and one (1) common share purchase warrant (a "Warrant"). Each Warrant shall be exercisable into an additional common share of Challenger for a period of twenty-four months from the date of issuance of the Warrant, at an exercise price of $0.90. It is anticipated that the Corporation may pay finder's fees to eligible arm's length finders in connection with the Private Placement. The finder's fees may be payable in cash or Warrants.
The gross proceeds from the Private Placement will be used for the further exploration of the Tabang property for the investigation and acquisition of additional Indonesian coal exploration projects and for general corporate purposes.
Marketing Agreement
Challenger has retained the services of Maximus Strategic Consulting Inc. to provide advertising services to the Company. Maximus operates the Pinnacle Digest website. Maximus will receive an aggregate fee of $60,000 plus applicable tax. The term of the contract is six months.
The Qualified Person (as defined by NI 43-101) responsible for the review and approval of the technical material presented in this news release is Mr. Andre Talaska (P. GEO), an officer and director of Challenger's wholly owned subsidiary, PT Bestindo Energy, through which Challenger's Indonesian activities are conducted.
Source: Challenger Deep Resources Corp.