Challenger Deep Resources Corp.

Challenger Deep Resources Corp.

March 14, 2011 07:00 ET

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

CALGARY, ALBERTA--(Marketwire - March 14, 2011) -


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 Prapatan Prima Coal ("PT PPC"), which gives Challenger the exclusive right, for a period of 45 days, to purchase all of the shares of PT PPC through the execution of a Conditional Share Purchase Agreement ("CSPA").

PPC Property

PT PPC is a private Indonesian company which holds an IUP Exploration permit granted in April, 2010 and valid for up to 7 years. The IUP covers an area of 2,994 hectares and is located in the regency of Berau, approximately 300km north of the provincial capital of Samarinda, East Kalimantan, Indonesia. The property, known also as PPC, covers the Latih and Tanjungredeb geological formations which are prospective for coal in this area.

The PPC IUP immediately adjoins the northern boundary of the property hosting the Berau Coal operations, specifically the Lati area. Outcrop and scout drill data data provided by PT PPC 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.

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

A program of due diligence is to commence as soon as possible to verify the data provided by PT PPC 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 the PPC Project. Challenger's execution of the CSPA to acquire PT PPC will depend upon the results of the initial due diligence program.

Terms of the CSPA

The MOU provides that, if Challenger elects to enter into a CSPA, they can acquire 100% of PT PPC for payments totalling $3,605,000 CAD. Terms of the payment include $72,100 CAD upon signing, $277,307 CAD within 6 months of signing the CSPA and the balance of $3,255,593 CAD due on the 18 month anniversary of the CSPA signing.

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 = 0.000110923CAD.

"The PPC project represents an excellent opportunity for Challenger to acquire a project in an area of known coal production with an existing IUP Exploration permit in place. Our team has spent the last several months of extensive due diligence on many projects and the PPC Project presents an exciting opportunity that we look forward to working on," stated Ranjeet Sundher, President of Challenger. "Our team continues to evaluate other potential opportunities in this area and other areas of East Kalimantan."

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.


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


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
    Challengere Deep Resources Corp.
    Kirk Gamley or Mas Kobuchi
    Investor Relations