Waratah Coal Inc.
TSX VENTURE : WCI

Waratah Coal Inc.

January 23, 2008 09:00 ET

Waratah is Pleased to Announce an Increase EPC 1040 South Alpha Inferred Resource to 2.145 Billion Tonnes of Coal

Waratah's Total Inferred Resources Now 2.820 Billion Tonnes in Galilee Basin

BRISBANE, AUSTRALIA--(Marketwire - Jan. 23, 2008) - Waratah Coal Inc (TSX VENTURE:WCI) today announced the upgrading of its estimate from 1.470 billion tonnes to 2.145 billion tonnes of inferred coal resource at Waratah's South Alpha project Galilee Basin, Queensland, Australia.

This revised estimate comes with the inclusion of recently completed boreholes, the return of additional bore core analysis and the granting of EPC 1079 which flanks EPC 1040 down dip to the west. In addition, several "infill" boreholes have been drilled to improve structural confidence of the resource. These boreholes have allowed extrapolation of the resource and will, with further infill, assist in the upgrading of the JORC resource status.

This inferred resource lies 60 kilometres south of the 675 million tonne inferred coal resource at Waratah's North Alpha EPC 1053 project, announced September 10, 2007. The combined inferred resource from both the North Alpha project and today's newly-expanded South Alpha project totals 2.820 billion tonnes. Waratah is continuing to explore both the EPC 1053 and adjacent EPC 1039 tenements and to date results are promising.



Highlights include:
- Highly continuous, shallow dipping coal seams
- High-quality, low-sulphur thermal coal
- 60 kilometres along strike from Waratah's 675 mt North Alpha resource
- Drilling continues to track the seam strike to the south in the South
Alpha lease and west into the newly granted EPC 1079.

SRK Consulting, independent technical advisors to Waratah, have reviewed
data from 47 open and partially-cored boreholes and subsequent resource
modelling to validate the following inferred resource category on the
northern portion of the South Alpha permits 1040 and 1079.

Table 1: Inferred resources, South Alpha

---------------------------------------------------------
Inferred Resources South Alpha
January 2008
---------------------------------------------------------
Seam Seam Thickness Tonnage Coal Area
(m) (Mt) (km2)
---------------------------------------------------------
B 6.42 999 89.9
---------------------------------------------------------
C 1.84 313 111.3
---------------------------------------------------------
DT 2.09 384 123.5
---------------------------------------------------------
DB1 0.60 115 126.0
---------------------------------------------------------
DB2 1.76 334 126.5
---------------------------------------------------------
Total 2,145
---------------------------------------------------------


Drilling continues with two rigs moving south and west on 2 kilometre spacing and a further drill rig infilling. The resource will be periodically updated as further results come to hand. As previously stated by SRK:

"These resources are expected to extend to the south of the drilling area as indicated by the strike and dip of the strata. The northern boundary of EPC 1040 is located at the southern boundary of existing defined JORC Code compliant resources at Alpha and Kevin's Corner of 2.05 billion tonnes of coal. This boundary is artificial and constrained by a property boundary fence line. The prospect generally has the potential to produce high tonnages of good quality coals at shallow overburden depths, and is located near roads, rail and basic infrastructure. The structurally benign geological environment may make the seams amenable to underground longwall mining."

Coal quality tests confirm that the seams average 0.5% sulphur, with an average calorific value of 26 MJ/kg or 11,202 Btu/lb on a washed or beneficiated basis. For comparison, the Barlow Jonker Index of spot prices is currently US$90.15 per tonne FOB as of January 17, 2008 and is based on export thermal coal at the Newcastle, Australia coal terminal with a calorific value of 28 MJ/kg and a sulphur content of 0.8%.

To view Figure 1, the chart showing the Australian Thermal Coal Spot Price Ex-Newcastle, please visit the following link http://www.ccnmatthews.com/docs/figure_1.jpg.

Mr. Peter Lynch, CEO of Waratah Coal noted "We now have identified a combined inferred resource of 2.820 billion tonnes in the Galilee Basin, with the coal seams open along strike and down dip. With the granting of EPC 1079, Waratah can now extend its drilling down dip to the west. Three drills are currently operating in the southern tenements and two in the northern tenements continuing to expand and improve Waratah's resources.

Whilst the resource upgrade is pleasing, drilling has been hampered by the early onset of long overdue Queensland wet season. This is a far change of fortune for landholders in the area who have suffered from over fifteen years of drought and whilst Waratah's exploration has been mildly affected we are overjoyed for the landholders with whom we work closely in the field."

Waratah continues to study various mining and infrastructure options necessary to efficiently exploit these deposits and others in the Basin.

Waratah Coal has to date been granted five Exploration Permits - Coal over 2,155 km2 in the Galilee Basin with a further 2,732 km2 in application. Waratah's North Alpha and South Alpha permits are adjacent to Hancock Prospecting Pty Ltd's MDLA 333 and EPC 570/MDLA 285 permits, which is reported to host a measured and indicated coal resources of 2.1 billion tonnes as reported in the Queensland Coal Resource Inventory, Queensland Coals 14th Edition 2003, Queensland Government, Department of Natural Resources and Mines.

To view Figure 2, the location of 2.145 Bt Inferred Coal Resources on Waratah Coal's EPC 1040 and 1079 Galilee Basin, please visit the following link http://www.ccnmatthews.com/docs/figure_2.jpg.

To view Figure 3, the cross section through the third line of drilling at Waratah Coal's EPC 1040, please visit the following link http://www.ccnmatthews.com/docs/fig_3.pdf.

Waratah commissioned a full range of coal quality analyses on the cored sections on a ply-by-ply basis. The results were then composited into full seam sections and washability analyses were conducted at cumulative Float/Sink 1.50 (F1.50) fraction on the South Alpha coal. Results for the washed product are shown in Table 2.



Table 2: Washed coal results

---------------------------------------------------------------------
WASHED COAL (F1.50)
---------------------------------------------------------------------
SEAM Yield Air Dried Ash % Volatile Fixed Total Calorific
Moisture Matter Carbon Sulfur% Value
---------------------------------------------------------------------
(%) ad(%) ad(%) ad(%) ad(%) ad(%) ad(MJ/kg)
---------------------------------------------------------------------
B(i) 56.4 8.1 18.4 30.3 43.2 0.37 23.81
---------------------------------------------------------------------
C 69.3 7.6 10.9 35.3 46.3 0.80 26.63
---------------------------------------------------------------------
DT 60.4 7.4 11.1 33.2 48.4 0.57 26.31
---------------------------------------------------------------------
DB1 85.5 6.5 10.4 34.2 49.1 0.46 27.27
---------------------------------------------------------------------
DB2 86.7 7.6 7.4 34.4 50.7 0.49 27.81
---------------------------------------------------------------------
(i) Only early F1.6 washability data available. No F1.50 washability data
at this date


The announced resource is now based around a total of 47 partially cored and chip holes for structural confidence. The boreholes were drilled by two truck-mounted Mayhew 1000 drilling rigs. Each borehole was wireline logged by Geoscience Associates (Australia) Pty Ltd geophysical logging equipment. Bed resolution density, short spaced and long spaced density, gamma and calliper logs were run in all boreholes. These logs were used to clearly identify the seam correlations and core recovery. All cored sections were logged by the site geologist for detail lithological descriptions. Core losses were re-constructed from the wireline logs. After reconciliation with the wireline logs, seams were split into plies for laboratory analysis. Coal core samples were sealed in plastic bags and despatched to ACIRL Pty Ltd laboratories in Emerald, Australia for analysis. The samples were prepared in laboratory conditions in accordance with Australian standards.

The data used in this report was supplied by Waratah Coal's Exploration Manager, David Campbell. The data was adjusted to the downhole geophysical logs and these intervals were further validated by Waratahs Senior Coal Geologist, Andrew McLaughlin.

The information was then processed in Minescape, a proprietary 2-Dimensional modelling system which calculates the best fitting surfaces for coal deposits, taking into account the regional trends together with the ability to honour the borehole data given the appropriate modelling parameters.

Coal tonnage calculations have also been upgraded to reflect actual seam densities from the suite of 15 cored borehole raw coal analyses obtained from ACIRL. Prior to all this recent core analysis a conservative RD of 1.40 had been applied. Washed product analysis (Float 1.50) have not changed from previous announcements and yields now reflect the true seam densities.

SRK provided a third party peer review of these results. Their validation process included cross checking the downhole geophysical logs with the data presented. The new model developed was then scrutinised using seam thickness, structure contours and cross sections to ensure validity and endorsed by SRK.

To see maps and sections, visit the News and Events section of www.waratahcoal.com, or contact the company.

Geological Overview

The seams in the Alpha area are sub-bituminous high volatile perhydrous coals suitable for use as thermal coal and potentially liquefaction, gasification and other petrochemical applications. There are five principal coal seams developed at the South Alpha Project which have defined continuity and significant resources.

The seams dip gently (0.5 to 1.0 %) to the west, and appear to be structurally continuous with little, if any, faulting. The seams are within the Galilee Basin, which covers an area of 247,000 km2 in Central Queensland. This basin is entirely intracratonic and is filled with Late Carboniferous to Middle Triassic sediments. These rocks are dominantly fluvial in origin with minor glacial material developed at the base of the succession.

The Galilee Basin contains extensive coal deposits, although these are largely very deep except for the eastern margin, where the Waratah Coal South Alpha project lies. The basin is almost entirely unconformably overlain by the Jurassic - Cretaceous Eromanga Basin. The eastern margin of the basin is the only exposed component of the Permo - Triassic sequence.

Within EPC 1040, Quaternary alluvials and Tertiary sands, clays and laterites unconformably overlay the distinctive grey-greenish Triassic mudstones and claystones of the Rewan Formation (Fm). The Rewan Fm, in turn, unconformably overlays the Late Permian shales, siltstones, sandstones and coal seams of the Bandanna Fm. The Quaternary sediments comprise of unconsolidated alluvial sands ranging in thickness from 0 m to 30m. The Tertiary comprise of unconsolidated to semi-consolidated sediments ranging in thickness from 30m to 125m. Within EPC 1040, the Quaternary and Tertiary combine to form a thick cover of overburden ranging from 95 m to 125 m over the Bandanna Fm. The Rewan Fm, consisting of Triassic competent claystones and siltstones, is situated unconformably between the overlying Tertiary and the underlying Late Permian Bandanna Fm. The Bandanna Fm and the Colinlea Sandstone comprises of lithic sandstone, siltstone, claystone, carbonaceous mudstone and five coal seams. The upper two (seams A and B) occur in the Bandanna Formation and the lower three (seams C, D & E) in the Colinlea Sandstone.

The Qualified Person for this resource estimate is Mr. Patrick Hanna, Fellow of the AusIMM and Principal Coal Geology Consultant with SRK Consulting, who conducted a peer appraisal on EPC1040/1079 on January 18, 2008. The resource estimates were compiled using data supplied by Mr David Campbell, Fellow of the AusIMM and Vice President Waratah Coal and modelling by Mr Andrew McLaughlin, Member of the AusIMM, and Senior Coal Geologist Waratah Coal.

Investors and shareholders are encouraged to review the information relating to the company's projects on its website www.waratahcoal.com.

The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this release.

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