CALGARY, ALBERTA--(Marketwire - Aug. 16, 2011) - Challenger Deep Resources Corp. (TSX VENTURE:CDE) ("Challenger" or the "Company") announces that, through its wholly owned subsidiary, P.T. Bestindo Energy, ("Bestindo") it has exercised its previously announced option to purchase an additional coal project in East Kalimantan, Indonesia. In exercising this option, Bestindo has entered into a Conditional Sales and Purchase Agreement (the "CSPA") with the shareholders of PT Pelangi Kertanegara ("PT Pelangi") for the purchase of 100% of the issued and outstanding securities of PT Pelangi.
PT Pelangi is a privately-held Indonesian company that holds the coal exploration rights to the property which is located in the Mahakam river basin in East Kalimantan, Indonesia, known as the Pelangi Project. PT Pelangi has no other assets and has conducted no business other than holding their interest in the Pelangi Project.
Challenger's decision to exercise the option to purchase follows a successful program of initial due diligence conducted on the property. The due diligence program involved field mapping, surveying and limited sampling. The results of this preliminary program have encouraged Challenger to move to the CSPA stage for the property.
The acquisition of the Pelangi Project is subject to approval of the TSX Venture Exchange.
The Pelangi Project is an IUP application stage property with an area of approximately 4,000 hectares located approximately 10km south of Challenger's Tabang Coal Project. The Pelangi Project covers the Balikpapan formation which is prospective for coal in this area. The Balikpapan formation is known to host large resources of coal in the general Tabang area.
A program of advanced due diligence is still continuing and includes reconnaissance mapping, further sampling and analysis.
The property lies on the Balikpapan Formation, which typically has coal in the CV 4,000 – 6,000 Kcal/Kg Adb range.
To date exploration covering 20% of the area has discoverd 26 coal outcrops indicating multiple seams with thicknesses varying from 0.25 to 2.6 meters. These are minimum thicknesses in most cases as the full exposures of the outcrops have not been established. The coal quality can be seen in the following table and indicates coal quality charcateristic of upper to middle Balikpapan Formation.
The Pelangi Project is immediately adjacent to and abutting the Pt Bumi Alam Raya property where exploration has reportedly delineated commercial quantities of coal. The limited exploration to date on the Pelangi Project appears to confirm that similar coal geology extends to the east and into the Pelangi Project area. Challenger has not independently verified coal quantity or coal quality on the adjoining property.
Pelangi Project Coal Samples
|OC RAB 1||48.41||20.34||4.56||38.33||36.77||0.19||4778|
|OC RAB 2||44.85||17.32||3.87||41.48||37.33||0.16||5105|
|OC RAB 5||43.94||18.60||8.86||37.06||35.48||0.40||4698|
Each coal seam was sampled and all samples were submitted for analysis 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.
The IUP Exploration Permit application is in progress and exploration drilling of the property will commence upon receipt of the permit.
The acquisition of the Pelangi Project forms part of Challenger's strategy of establishing a significant land position in the Tabang-Kembang Janggut area. Having multiple properties in the Tabang Coal District will permit coal quality blending to maximize the export market potential for production.
Terms of the Pelangi CSPA
The Pelangi CSPA includes a payment of $33,300 CAD upon execution and payment of the remaining $1,775,000 CAD over the next approximately 18 months, in three scheduled payments. Timing of the remaining payments to be made is based on the date of the issuance of an IUP exploration permit by the relevant Indonesian Governmental authority. The CSPA also provides that upon Bestindo's production and sale of coal from the property, it will grant and pay to the vendors of the shares of PT Pelangi, a royalty of USD $1.50 per ton.
Challenger proposes to pay a finder's fee to an arm's length party in connection with the introduction of the Pelangi Project acquisition. The finder's fee will be payable in cash in an amount calculated in accordance with the TSX Venture Exchange policies and subject to the approval of the TSX Venture Exchange.
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.
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, preliminary exploration results, 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.