Challenger Deep Resources Corp.
TSX VENTURE : CDE

Challenger Deep Resources Corp.

April 07, 2011 07:30 ET

Challenger Obtains Exclusive Option to Purchase Coal Project in East Kalimantan, Indonesia

CALGARY, ALBERTA--(Marketwire - April 7, 2011) -

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Challenger Deep Resources Corp. ("Challenger" or the "Company") (TSX VENTURE:CDE) is pleased to announce that it has, through its wholly-owned subsidiary, PT Bestindo Energy, ("Bestindo") entered into a Memorandum of Understanding ("MOU") with the principal shareholder of PT Bara Mandiri Utama ("PT BMU"), which gives Challenger the exclusive right, for a period of 45 days, to purchase all of the shares of PT BMU through the execution of a Conditional Share Purchase Agreement ("CSPA").

PT BMU Properties

Pt Bara Mandiri Utama is a private Indonesian company which owns 4 contiguous IUP applications (CV Kiat Perdana Samboja, 98.7Ha; CV Bara Gemilang Samboja, 91 Ha; CV Gani Tilanta Samboja, 91.74; CV Buana Lipu, 98.35 Ha) in the Samboga District, Regency of Kutai Kutai Kartanegara, East Kalimantan. The project is located directly on the coast just south of the Mahakam estuary North of Balikpapan and covers a total area of 380Ha.

The area covers the Kampung Baru geological formation which is known, in East Kalimantan, to host thick seams of medium CV (5100-5300 kg/kcal) thermal coal. Coal outcrops have been observed on the project area however quality and extent have not been confirmed. The area is immediately adjacent (1km) to an independent coal loading terminal (under construction) with a multi-use haul road passing directly through the project. The coal facility is being constructed to service operations immediately inland with similar coal quality targeted for the project.

The target for the area is low strip ratio, marketable thermal coal strategically located with adjacent port and haul facilities.

A program of due diligence is to commence as soon as possible to verify the data provided by PT BMU and to confirm Challenger's exploration target parameters. The due diligence program will include surface reconnaissance and mapping, sampling and analysis in order to evaluate the potential of each property. Challenger's execution of the CSPA to acquire this project will depend upon the results of the initial due diligence program. A more detailed technical description of the properties will be made available if and when a CSPA is signed.

Terms of the CSPA

The MOU provides that, if Challenger elects to enter into a CSPA, it can acquire 100% of PT BMU for payments totalling $1,540,000 CAD. Terms of the payment include $33,200 CAD upon signing, $66,400 CAD in costs Challenger will incur processing the IUP Exploration permit, $221,505 CAD upon issuance of the IUP Exploration permit and the balance of $1,218,895 CAD 16 months following the execution of the CSPA.

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 Bestindo.

Challenger proposes to pay a finder's fee to an arm's length party in connection with the introduction of this acquisition opportunity, if Challenger elects to exercise its option. The finder's fee would be payable in common shares of Challenger in an amount calculated in accordance with the TSX Venture Exchange policies and subject to the approval of the TSX Venture Exchange.

The purchase price under the CSPA is payable in Indonesian Rupiahs (Rp) and figures used in this release are based on a conversion rate of 1.00 Rp = $0.000111 CAD.

"This is a very interesting potential acquisition because of its geological potential and its proximity to transportation infrastructure," stated Ranjeet Sundher, President of Challenger. "This property fits well into our growing portfolio of exploration and development prospects and we are excited to add this property to our due diligence program."

In order to focus on coal exploration and development in East Kalimantan, Challenger announces that is has surrendered, back to the lessor, its leasehold interest in the Redrock and North Battle Mountain gold properties located in Nevada. Challenger now intends to devote all of its efforts and resources on its coal exploration and development business.

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