Ann: Activities Update Quarter Ended 30 June 2011, page-2

re: Ann: Activities Update Quarter Ended 30 J... ACTIVITIES UPDATE
QUARTER ENDED 30 JUNE 2011
? Significant coal seams intersected in Ovorhangay Province
? Initial raw coal quality tests confirm presence of high quality coking properties likely
to be enhanced by coal washing
? Exercise of rights under Option Agreement to acquire 8 licences covering approx.
625km2 from international coal developer
? Large number of coal samples still to be calibrated and assessed with further results
to be released to market over the coming weeks
? In‐country partner secured to identify & develop coal deposits in Indonesia
MONGOLIAN UPDATE
C @ Limited (?CEO?) is extremely please with the significant progress made during the
quarter in respect of its due diligence exploration program on the 8 coal licences located in
the South Gobi province and the adjoining Ovorhangay province in southern Mongolia.
The Company recently exercised its rights under the exclusive option agreement to acquire
these licences which cover a vast area of approximately 625km2.
Exploration work by CEO discovered three significant coal intersections on the Ovorhangay
licences. The first hole (BTE‐1) produced a coal seam thickness of 60m from surface and was
estimated to comprise one major coal seam. The second hole (BTE‐2), located 280m
northwest from BTE‐1, achieved a 40m coal seam thickness commencing at 89m in depth,
which was also estimated to comprise one major seam.
The fifth hole (BTE‐5), which was drilled approximately 6km to the northwest of BTE‐2 at the
northern end of the licence, also intersected coal at 38m for 12m and then a shaley coal
sequence, with occasional siltstone partings at 141m for 15m.
Due to the extensive area of land under licence and the limited time frame imposed by the
due diligence, no infill drilling was able to be undertaken between these major intersections.
It still remains unclear if the potential coal bearing sequence in BTE‐1, BTE ‐2 and BTE‐5
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forms part of the same coal seams and geological structures, or are completely different
structures.
A large number of coal samples taken from intersections in BTE‐1 and BTE‐2 were sent to
SGS Laboratories in Ulaanbaatar, Mongolia to undertake quality analysis. Due to the large
size of these seams and sample points, CEO is still working on the test results including the
requirement for washability testing with leading industry experts and will update the market
as soon as this information comes to hand.
To better understand the coal?s metallurgical potential, the Company also sent an individual
random raw coal sample from BTE‐2 to ALS Laboratories, Australia. ALS provides an
extensive and highly specialised analysis service and are leading experts in metallurgical coal
analysis.
Results from the initial coal sample are provided below:
BTE‐2 Results of Analysis
Energy ‐ kcal/kg (db) 6,567
Energy ‐ kcal/kg (daf) 7,530
Total Moisture (ar) 4.5%
Ash (ar) 12.2%
Sulphur (ar) 0.91%
CSN 3
Carbon (db) 67.3%
Vitrinite (by volume) 90.1%
Ovorhangay Province: Drill Core from BTE-1 from 18.0m to 19.5m
On 15 July 2011 CEO exercised its rights under the Option Agreement, which sets out the
steps for negotiation of the definitive sale and purchase agreement. It is anticipated that
further negotiation will take place over the next few weeks to finalise a definitive sale and
purchase agreement for execution.
The Company has started planning an extensive exploration program on the Ovorhangay
licences which it intends to commence immediately upon signing the sale and purchase
agreement. This program will include substantial drilling in addition to geophysics and
seismic testing.
INDONESIAN UPDATE
CEO?s local Indonesian partner Ethica Trade Cermelang initially identified a number of coking
and high energy thermal coal project opportunities located in Indonesia. These and other
projects are currently under review by the Company.
AUTHORISED BY:
Mark Earley
Managing Director