C Limited intersects significant coal in Mongolia

Monday, 18 Jul 2011

Perth based C @ Limited has discovered two significant coal intersections on the Ovorhangay licences after completing its technical due diligence exploration program in southern Mongolia.

The coal licences are located in the South Gobi province and the adjoining Ovorhangay province, which the company holds under an option agreement with a major international developer.

C @ Limited also announced that it has exercised its rights under an option agreement to acquire a total of eight licences in the Ovorhangay and South Gobi provinces from an international coal developer. The licences cover an extensive area of about 625 square kilometres.

Under the terms of the option agreement the consideration for the coal licences was set at USD 7.7million. The company expects that further negotiation will take place over the next few weeks to finalise a definitive sale and purchase agreement for execution.

The licences in Ovorhangay are close to existing mining operations, providing some infrastructure, and easy access to the Chinese coal markets. Interestingly, C @ Limited is known to be in talks with a number of strategic investors.

The two intersections in the Ovorhangay licences are located 280m apart and the first hole produced a coal seam thickness of 60 metres from surface and was estimated to comprise one major coal seam.

The second hole achieved a 40 metre coal seam thickness commencing at 89 metres in depth, which was also estimated to comprise one major seam.

The company said it is still unclear if these two intersects form part of the same coal seam or are two different structures.

Mr Mark Earley MD of C @ Limited said the company is delighted with the results achieved from its due diligence exploration program, particularly those from the Ovorhangay province. He added that "The work done to date only starts to scratch at the surface of the potential of these licences. Upon successful completion of the sale and purchase agreement, the company will embark upon a substantial drilling program on the licenses."

(Sourced from Proactiveinvestors)