18 METRE COAL THICKNESS INTERSECTIONS AND A MAIDEN 11.3 MILLION...

18 METRE COAL THICKNESS INTERSECTIONS AND A MAIDEN 11.3 MILLION TONNE COAL RESOURCE AT THE TABALONG COAL PROJECT.
THE TABALONG COAL PROJECT IS POISED TO PROVIDE HADDINGTON RESOURCES LIMITED WITH AN ENTRY INTO THE THERMAL COAL MARKET.
Haddington is pleased to announce that it has intersected a coal seam up to 18 metres thick at its Tabalong coal project in South Kalimantan, Indonesia, which has increased the project resource base allowing the project to move to a more detailed feasibility study.
Recent drilling in the northern part of the Tabalong deposit has identified a thickening of the main coal seam from 3 metres to 18 metres. The feature appears to be a localised coalescence of 2 seams which covers an area of some 16 hectares.
Independent analytical testing has confirmed that the coal in the thicker seam (Hole KH108C) has the same high energy, low ash and sulphur characteristics of the coal encountered in the southern part of the project, with energy for the thicker seam averaging 7,300 kcals/kg (adb), ash 1.6% and sulphur 0.5%.
The Company has calculated a maiden Coal Resource for the Tabalong coal project. Resource calculations have been completed in accordance with JORC guidelines and place the estimated initial Measured Resource at 3.1 million tonnes with a further estimate of 3.2 million tonnes of Indicated Resources and approximately 5.0 million tonnes of Inferred Resources, for a total estimated Coal Resource of 11.3 million tonnes.
Haddington Resources Ltd through its 100% subsidiary, PT Minvest Mitra Pembangunan has an option agreement over the two KP’s of the Tabalong Coal Project that may be exercised prior to May 2009. The leases are shown in red on the attached location map.
The initial exploration phase for the Tabalong project has been completed and the Company will now move to incorporate the resource and coal data into the feasibility study for development of the project to production.
The initial exploration phase has involved 12,904 meters of open hole drilling and 105 meters of core drilling with 298 open holes and 34 partly cored holes completed. The drilling has proved the existence of 8 separate coal seam intervals that extend along strike for a distance of approximately 14 kilometres. The coal is contained within the Tanjung Formation which is currently the focus of a number of current and potential coal mining operations in eastern-central Kalimantan.
Exploration to date has been confined to following the shallow (<50m) extent of the middle section of the coal sequence. The recent discovery of the significant pod of coal of up to 18 metres in thickness at shallow depth (<50m) may well signify that other large pods are present in the sequence but are as yet undiscovered. More extensive and deeper drilling (to 150m depth) will now be programmed to test this possibility.
The resources indentified to date are contained within approximately 25% of the lease area, leaving large areas which are currently unexplored. The current program is being reviewed and additional drilling targets defined. Subsequent drilling programs will be focused toward expanding the resources base as well as proving reserves to sustain production.
Laboratory results received for a number of cored intersections throughout the resource show the Tabalong coal to be a high volatile, low ash, low moisture and low to medium sulphur thermal coal product. Coal quality results for each coal interval are displayed in the table below. The marketing prospects for this type of coal appear very attractive.
Thermal coal prices in Australia (considered a benchmark for Asian coal prices) have jumped to a record high of over $US150 a tonne this week, aided by high oil prices and strong demand amid tight supplies. The demand for energy, and in particular coal, is expected to continue growing in nearly all of the world’s major consuming regions.
Haddington has carried out conceptual project feasibility in order to ascertain the annual production limits, infrastructure requirements, transport options and product marketing. Present plans are for annual production and sales of coal at 500,000 tonnes to 750,000 tonnes. Product coal could be transported by truck west to the Barito River, east to the South Kalimantan coast or sold locally to other producers for ongoing transportation to final market destinations.
Present indications are that the Tabalong project could be in production in early 2010, providing Haddington with an entry into the lucrative thermal coal market.