acquires more coal concessions in tanzania

28th May 2008


ATOMIC OPTIONS ADDITIONAL COAL PROJECTS IN TANZANIA


Atomic Resources Limited (ASX Code: ATQ) (“Atomic”) is pleased to announce that it has entered into a Memorandum of Understanding (“MOU”) with the Upendo Group Limited (“Upendo”) of Tanzania, to explore and develop the Muse, Mkolomo and Namwele coal Prospects in the Rukwa Basin region of southern Tanzania through its Tanzanian registered subsidiary, Pacific Corporation East Africa Limited (“PCEA”).

Under the terms of the MOU, Atomic has a 90 day period to complete due diligence on the project concessions and to verify historical technical data. On completion of successful due diligence, PCEA will enter into a Joint Venture (“JV”) agreement taking up to an 80% interest throughout project development. Upendo will be free carried for its remaining 20% interest.

PCEA has agreed that as part of the JV terms not less than US$500,000 will be spent on the project areas within the first 24 months with expenditure contributions from Atomic deemed to be loan funding to the JV to be recovered from any future earnings.

Whilst no JORC-compliant resources are currently available, there is public literature* available on the coalfields with very small scale open cast production is in operation at the Namwele deposit. To date only 9,685 tonnes has been produced and sold for industrial use as steaming coal to the Mbeya Cement Factory, Mbeya Textile Factory and Mufindi Paper Mills at Iringa.

Based upon the technical information provided as well as Government geological publications the company is seeking a potential target size of between 40 to 50 million tonnes of thermal coal within the three prospect areas combined. These estimates cannot be categorized as resources, in accordance with section 18 of the JORC Code, and are therefore regarded only as potential target tonnages which require additional geological investigation. The coals are considered to be potentially thermal quality coal with moderate to low sulphur and moisture and high ash content. Geologically the coal seams lie within the Karoo sediments preserved within depressions in the Precambrian basement. Whilst the coalfields of Tanzania have been well known for over a century, until now they have never been fully developed or systemically explored using modern exploration techniques.

Executive Director Mr. David Holden said, “Given that we were in the Southern Tanzanian region already and starting pre feasibility studies on the Njaka and Muhukuru coal fields, this opportunity will cement Atomics position as the dominant coal company in Tanzania. “

The company will seek to include the field work required for the resource definition work at the new projects with the drilling and resource estimation work planned for the main Ngaka and Muhukuru coal fields.

Further technical information is available on the company’s web site.

ENDS

*Stockly (1947) “New coal discoveries in Tanganyika”, reprint from the Mining Magazine, June- July 1947.