Challenger Deep Resources Corp.
TSX VENTURE : CDE

Challenger Deep Resources Corp.

May 13, 2011 07:00 ET

Challenger Deep Resources Corp.: Tabang and PPC Coal Project Updates

CALGARY, ALBERTA--(Marketwire - May 13, 2011) -Challenger Deep Resources Corp. ("Challenger" or the "Company") (TSX VENTURE:CDE) is pleased to provide the following updates regarding exploration drilling on the Tabang Project and the commencement of due diligence drilling on the PPC Project.

Tabang Project

Exploration of the Tabang Project to date has included mapping, outcrop sampling, test pitting and drilling. 14 drill holes have been completed to the end of March, 2011 for a total of 521m. A summary of the most recent test-pit sampling results and results of the drill program to date are provided below. The drill holes were located in a broad traverse cross-cutting the outcropping coal seams to understand the structure, stratigraphy and confirm coal quality. The holes were drilled to depths of 25 – 50 metres.

Initial Drilling Results indicate the following:

  • Multiple seams (7).
  • Seams are flat dipping (10-20 degrees).
  • Coal quality from drilling confirms previous test pitting and outcrop sampling results (see table for coal quality values).

Test Pit and Drill Sample Results

TMIMAshVMFCTSGCV (Kcal/Kg)HGILaboratory
%,AR%,ADB%,ADB%,ADB%,ADB%,ADBADBARSGS
Test pit, seam A18.309.844.1246.8339.210.2465085897SGS
Test pit, seam E23.5114.342.8642.4940.310.3061625502SGS
Test pit, seam A19.8011.393.7042.5442.370.2162745679SGS
Test pit, seam A22.8312.902.3139.1545.640.2462085500SGS
Test pit, seam B20.8315.413.0642.7038.820.2161955798SGS
Test pit, seam A22.0815.222.3136.8545.620.1861425645SGS
Drilling, seam C18.1211.0010.5543.5134.940.2660425559SGS
Drilling, seam E19.7110.847.3944.3637.410.2662385617SGS
Drilling, seam F18.5910.1610.6646.9232.260.2062625674SGS
Drilling, seam G18.6512.476.4545.6235.460.2162875843SGS
Drilling, seam A14.008.8621.0545.0925.000.2155775262SGS
Drilling, seam B18.8612.515.5946.8835.020.2264055940SGS
Drilling, seam A16.9910.845.6848.4335.050.1965566104SGS

All test pit and drill 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.

Exploration and drilling teams are currently conducting further operations on the Tabang property.

Current ongoing exploration includes:

  • Grid drilling at 400m centres to expand the known area of coal and to futher delineate structural/ lithological controls and define seam geometry within and outside the area of outcropping coal.
  • Continued test pitting and mapping to delineate additional coal seams and further define known seams.

Tabang Regional Exploration

Additional prospects within the Tabang general area are being assessed as part of Challenger's strategy to expand the present land holdings to include coal resource potential from Ujoh Bilang, Batu Ayau and Balikpapan formations (upper, lower and middle). The former to provide higher coal quality and the latter to provide tonnes of low strip coal. The ultimate goal is to establish a blending operation in order to maximize returns by combining coal of different quality whilst minimizing overall mining costs.

PPC Project

As previously reported, Challenger has an exclusive option, in the form of Memorandum of Understanding, to enter into a Conditional Share Purchase Agreement relating to the private Indonesian company which holds the IUP Exploration Permit for the PPC project.

The 2,994ha PPC Project immediately adjoins the northern boundary of the property hosting the Berau Coal operations, in the Lati area. Berau Coal is one one of the largest coal operations in Indonesia with production of 14.4 million tonnes in 2010.

Due diligence reconnaisance mapping has been completed by Challenger and it has been decided to extend the program with the drilling of 100m deep holes to test previously reported intersections and the possible extension of coal seams from the adjacent Berau Coal mining operations.

This program has commenced and will initially consist of 5 drill holes. Drilling equipment is on the property and actual drilling operations will commence once locations have been prepared. The drilling program will continue if the initial holes are successful.

Outcrop and scout drill data data provided by the IUP Exploration Permit holder indicates the presence of at least 4 coal seams. The average cumulative thickness from the drill data is 11.7m from 3 seams with maximum widths of individual seams of around 4m. Challenger's drill program is intended to confirm this information.

The target for the PPC Project is coal with a low strip ratio, GCV(adb) of 5,600-6,000 kcal/kg with very low sulfur.

In order to permit its ongoing investigations, Challenger has negotiated a 45 day extension to the existing MOU which will allow it to enter into the final Conditional Share Purchase Agreement on or before June 6, 2011.

Commenting on the programs today, Mr.Ranjeet Sundher, President and CEO of Challenger stated: "We are very pleased with the initial drill results on the Tabang Project as verification of the results of our initial due diligence. We have been working steadily on the regulatory process of obtaining an IUP Exploration Permit for this project and have received all preliminary approvals for the permit and for our drill program and expect that the actual issuance of the IUP permit will be imminent. Drilling operations are presently ongoing and a more extensive drill program is planned in contemplation of receiving this key regulatory element of the project." Referring to the PPC Project he continued: "Bringing this project to the drilling stage is very exciting given its proximity to producing coal operations. The fact that the PPC Project has an IUP Exploration Permit has meant that we could advance to the drilling stage much quicker than would otherwise have been possible."

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, a director of PT Bestindo Energy, a wholly owned subsidiary of Challenger.

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.

Contact Information

  • Challenger Deep Resources Corp.
    Ranjeet Sundher
    President
    +65-6220-7745

    Challenger Deep Resources Corp.
    Kirk Gamley or Mas Kobuchi
    Investor Relations
    604-689-7422
    www.challengerdeep.ca