Pan Asia Corporation Ltd.
Pan Asia Corporation Ltd.: COMPANY UPDATE ON DRILLING ACTIVITIES AT RODA NIAGA & TCM COAL PROJECTS,
Pan Asia Corporation Ltd. / Miscellaneous 19.01.2010 Dissemination of a Corporate News, transmitted by DGAP - a company of EquityStory AG. The issuer / publisher is solely responsible for the content of this announcement. --------------------------------------------------------------------------- COMPANY UPDATE ON DRILLING ACTIVITIES AT RODA NIAGA & TCM COAL PROJECTS, KALIMANTAN, INDONESIA ACQUISITION OF COAL AND MANGANESE ASSETS IN INDONESIA - VARIATION TO HEADS OF AGREEMENT HIGHLIGHTS: - Coal intersected in all five holes drilled at Roda Niaga, coal analysis now received - Drilling has begun at the TCM Coal Project in South Kalimantan Dear Shareholders The Directors of Pan Asia Corporation Ltd (the 'Company'; ASX: PZC) are pleased to provide the following update on initial exploration activities on two of its thermal coal prospects in Kalimantan, Indonesia. While continuing to undertake due diligence on the extensive Innovation West Pty Ltd (Innovation West) acquisition, the Company has been actively exploring the two underground coal targets at Roda Niaga and TCM in South Kalimantan. RODA NIAGA COAL PROJECT, SOUTH KALIMANTAN The Company has completed initial drilling of the Roda Niaga Coal Project near Batulicin in South Kalimantan. The 6,412Ha Roda Niaga concession, along with the adjoining Kusan Persada concession, form the original assets acquired by PZC prior to the current planned acquisition of Innovation West. A total of 213m of open hole drilling and 1,090.4m of HQ core drilling was completed in five holes focussing on the north-western corner of the project. Drilling targeted the down-dip extension of coal seams mined in adjacent open pit operations with the view of identifying coal seams with potential to be exploited by underground mining methods. Coal has been intersected in every hole drilled; with seams ~ 2metres thick but containing some parting and high ash content. However, gross calorific values are moderate to high, with further improvement possible through washing. Sulphur values are generally low. Once the drilling is completed at the nearby TCM project, the Roda Niaga Project will be reviewed further to determine the scope of any additional work. Importantly, undertaking this first drilling programme has allowed the Company to establish a competent technical team with a now proven capacity to undertake efficient and effective drilling and exploration programs in Indonesia. This initial drill program was supervised by a representative of SRK Consulting who have also reviewed all drilling, sampling and reporting procedures. The Company's focus now moves to exploring the TCM concession, as well as the balance of the extensive portfolio of assets being acquired from Innovation West. The following coal intersections are reported from Roda Niaga:Hole No From (m) To (m) Interval (m) TM_% (ar) IM_% (adb) RN_01 107,49 108,72 1,23 4,2 3,5 108,88 109,53 0,65 5,9 5,0 RN_02 225,76 226,14 0,38 5,7 4,3 233,12 233,44 0,32 3,4 2,7 234,06 234,56 0,5 6,4 5 234,92 236,0 1,08 8,5 6,6 RN_03 345,8 346,72 0,92 4,7 3,8 347,12 348,18 1,06 7,5 6,1 RN_04 262,67 263,5 0,83 5,1 3,8 263,66 264,72 1,06 6,6 5,2 RN_05 242,31 243,62 1,31 5,4 4,0 243,8 244,61 0,81 7,7 5,5Hole No Ash_% VM_% FC_% S_% GCV cal/g CV cal/g (adb) (adb) (adb) (adb) (adb) (daf) RN_01 38 33,6 25 0,2 4326 7386 12,2 42,6 40,2 0,3 6402 7727 RN_02 18,6 43,0 34,1 2,1 6117 7931 28,6 39,4 29,3 0,3 5413 7875 24,6 38,3 32,2 0,3 5482 7783 19,5 38 36 0,3 5690 7696 RN_03 34,9 35,2 26,1 0,2 4675 7629 29,9 33,8 30,3 0,3 4795 7489 RN_04 28,1 37,9 30,2 0,3 5215 7660 16,0 40,5 38,3 0,3 6055 7685 RN_05 30,1 37,5 28,5 0,3 5044 7643 9,5 43,2 41,8 0,3 6651 7826(TM = Total Moisture; IM = Inherent Moisture; VM = Volatile Matter; FC = Fixed Carbon; S = Sulphur; GCV = Gross Calorific Value; CV = Calorific Value; ar = as received; adb = air dried basis; daf = dry ash free) Table 1 - Coal intersections and coal quality information from drilling at Roda Niaga.Longitude Latitude Hole No Degrees Minutes Seconds Degrees Minutes Seconds RN_01 115 50 11.8 3 21 54.6 RN_02 115 50 9.8 3 22 45.7 RN_03 115 50 26.6 3 22 54.4 RN_04 115 50 36.6 3 22 8.0 RN_05 115 50 51.1 3 21 53.7Table 2 - Drill hole coordinates from Roda Niaga. TRANSCOAL MINERGY (TCM) COAL PROJECT, SOUTH KALIMANTAN Drilling activities have begun on the TCM Underground Coal Project, located approximately 16km to the north of the Roda Niaga Coal Project in South Kalimantan. The 4,148Ha concession area is situated immediately adjacent to the 2Mtpa ATA open pit thermal coal mine currently being operated by PT Arutmin Indonesia (Figure 1). Coal seams being mined in the ATA pit are observed dipping shallowly into the TCM concession area, with the down dip position of these seams the key focus of the current exploration drilling campaign. The ATA mine typically produces a high-quality thermal coal with high calorific values, moderate sulphur and low ash. The initial drill program of six (6) holes at TCM aims to evaluate the south-western part of the concession, an area approximately 4.5km long and 1.2km wide (Figure 1 & 2). This area is immediately adjacent to the current operating area at the ATA mine (see Figure 1). Based on the results of these preliminary six holes, the Company may undertake further infill drilling to delineate coal resources in this area, as well as continue exploration and resource drilling further to the north. Initial results of the first drill holes are expected within the coming weeks. CEO Alan Hopkins said 'This is a good first up result & we are now keenly looking forward to the outcome of the TCM drilling ' Variation to terms of acquisition of Innovation West The Company wishes to advise shareholders that the consideration for the acquisition of Innovation West has been increased by an additional 25 million performance shares. As such, the share consideration is to be 630 million fully paid ordinary shares and 25 million performance shares. For the performance milestone to be met, the vendors must enter into an off take agreement for the sale of at least 50,000 tonnes of coal to a sizable and reputable international customer at any time up to 6 months after the performance shares allotment. Upon completion of the milestone, these performance shares will be converted to ordinary shares. The Company advises that legal due diligence on the projects / acquisition of Innovation West is ongoing and will update the market as to further progress. The Company will seek all regulatory and shareholder approval in respect of this transaction. Yours faithfully ALAN G. HOPKINS Chief Executive Officer Competent Persons Statement The data in this report that relates to Exploration Results is based on information evaluated by Mr Sigit Hardjanto who is a member of The Australian Institute of Mining and Metallurgy (MAusIMM) and who has sufficient experience relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2004 Edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (the 'JORC Code'). Mr Hardjanto is a fulltime employee of SRK Consulting and he consents to the inclusion in the report of the Mineral Resource in the form and context in which it appears. About Pan Asia Corporation Limited Pan Asia Corporation Limited is a rapidly growing diversified resources company listed on the Australian Securities Exchange with offices in Perth, Australia and Jakarta, Indonesia. The Company aims to be a major supplier of key resources into the expanding Asian markets and is well advanced in its due diligence and requirements for regulatory and shareholder approval for the acquisition of a number of significant coal and manganese assets in Indonesia. This diversified portfolio of assets includes projects in both production & exploration stages as well as a significant opportunity to participate in key infrastructure development which will complement the existing coal projects held by the Company. The evaluation & development of the current suite of assets in addition to new opportunities that arise from a strong local partner network will be the foundation for Pan Asia's aim to become a top tier coal & manganese company in Indonesia over the next three years. An extensive international financial network provides support for the Company's rapid growth plans. 19.01.2010 Ad hoc announcement, Financial News and Media Release distributed by DGAP. 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