Hunnu Coal gets mining licence at Tsant Uul project in Mongolia

Monday, 18 Jul 2011

Hunnu Coal announced that the Mineral Authority of Mongolia has granted a mining licence MV - 016872 for the Tsant Uul Project, covering total area of 69,233 hextare.

Key points
1. Targeting commencement of mining in the last quarter of 2011.

2. Targeting initial production of 1.5 million tonnes of coal in 2012 and 3 million tonnes in 2013.

3. Owner operator mining fleet currently being purchased with initial purchases including six CAT 773 Dump Trucks and a Hitachi 1200 excavator. Additional purchases underway.

4. Exploration and development drilling now totaling 56,101 metres of diamond drill core and RC since discovery of the Tsant Uul Deposit in middle of 2010.

5. Study for a coal haulage access road from Tsant Uul Mine site to the existing coal haulage road has been completed and is currently under Government approval process.

6. An update of the Tsant Uul Project JORC Resources is being completed. The Company's exploration target for the Tsant Uul Project is for 150 million tonnes to 200 million tonnes.*

7. Final test work and off take agreements progressing well.

8. New Coal discovery 7 kilometer north of the Tsant Uul Deposit, with drilling currently underway.

The Tsant Uul Project mining licence has been granted for an initial term of 30 years with an option for twenty years extension twice, providing a total of 70 years of mining operations.

The Tsant Uul Project is located in the World Class South Gobi Coal Province of southern Mongolia, approximately 40 kilometer to the south of the giant Tavan Tolgoi Coking Coal Deposit. The Tsant Uul Project has a current JORC compliant resource of 90 million tonnes, with 61 million tonnes in the Measured and Indicated categories.