Challenger Deep Resources Corp.
TSX VENTURE : CDE

Challenger Deep Resources Corp.

January 20, 2011 07:00 ET

Challenger Announces Preliminary Tabang Coal Project Exploration Results

CALGARY, ALBERTA--(Marketwire - Jan. 20, 2011) -

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Challenger Deep Resources Corp. ("Challenger" or the "Company") (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:

Seam   Remark   TM %,AR   IM %,ADB   Ash %,ADB   VM %,ADB   FC %,ADB   TS %,ADB   GCV (Kcal/Kg);ADB   GCV (Kcal/Kg);AR
seam A   Outcrops, channel   18.65   16.10   2.61   41.84   39.21   0.19   6,161   5,991
seam C   Outcrops, channel   19.77   14.01   3.12   47.02   35.90   0.22   6,398   5,966
seam G   Outcrops, channel   18.81   16.18   1.18   43.50   39.06   0.18   6,223   6,033
seam C   Outcrops, channel   22.19   16.46   5.76   39.34   38.46   0.27   5,795   5,396
seam D1   Outcrops, channel   20.41   15.85   1.68   45.09   37.34   0.18   6,222   5,888
seam G   Outcrops, channel   19.43   16.46   2.60   43.56   37.36   0.29   6,081   5,866
seam E   Outcrops, channel   16.64   13.08   2.38   51.37   33.19   0.20   6,669   6,394
seam C   Outcrops, channel   19.56   15.29   3.30   43.47   37.96   0.22   6,082   5,774
seam C   Outcrops, channel   20.40   15.76   2.70   42.66   38.96   0.23   6,078   5,738
seam D   Outcrops, channel   21.42   16.92   2.41   41.62   39.05   0.24   5,977   5,653
seam A   Test pit   24.99   16.38   2.49   33.89   47.24   0.21   5,919   5,310
seam E   Test pit   19.59   14.00   3.21   43.83   38.96   0.22   6,358   5,945
seam D1   Test pit   22.46   14.23   2.66   41.80   41.31   0.29   6,170   5,578
seam D   Test pit   20.93   13.68   2.73   42.86   40.73   0.24   6,243   5,719
seam C   Test pit   20.41   11.76   8.18   43.40   36.66   0.28   5,977   5,391
seam B   Test pit   21.48   14.56   3.07   41.39   40.98   0.27   6,165   5,666
seam F   Test pit   20.00   13.97   3.56   43.55   38.92   0.35   6,222   5,786

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."

About the Tabang Project

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.

About Challenger

Challenger Deep Resources Corp. is an exploration company focused on the Indonesian coal industry. Challenger's business plan is to acquire, explore and to bring its viable coal projects into production. Challenger has an experienced Indonesian exploration and mining team with offices in Calgary, Singapore and Jakarta.

CAUTIONARY STATEMENT

No stock exchange, securities commission or other regulatory authority has approved or disapproved the information contained herein.

READER ADVISORY

Statements in this press release may contain forward-looking information including, statements regarding expected exploration activities. Any statements that are contained in this press release that are not statements of historical fact may be deemed to be forward-looking statements. The reader is cautioned that assumptions used in the preparation of any forward-looking information may prove to be incorrect. Events or circumstances may cause actual results to differ materially from those predicted, as a result of numerous known and unknown risks, uncertainties, and other factors, many of which are beyond the control of Challenger. Factors that could cause the actual results to differ materially from those in forward-looking statements include, granting of exploration permits, surface access and other licenses from Indonesian regulatory authorities, continued exploration results, the establishment of commercial quantities of coal, availability of new acquisitions on commercially acceptable terms, the continued availability of capital and financing, and general economic, market or business conditions in North America and in the Asia Pacific region. The reader is cautioned not to place undue reliance on any forward-looking information. There can be no assurance that the proposed exploration programs in Indonesia or other project acquisitions will be completed or, if completed, will be successful.

The forward-looking statements contained in this press release are made as of the date of this press release, and Challenger does not undertake any obligation to update publicly or to revise any of the included forward-looking statements, whether as a result of new information, future events or otherwise, except as required by securities law.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy of accuracy of this news release.

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