ucg project progressing

COUGAR ENERGY ACQUIRES 51% OF QUEENSLAND
UNDERGROUND COAL GASIFICATION TENEMENT AREA
Melbourne, 9 May 2007: Cougar Energy Limited (ASX Code: CXY) has acquired 51% of an
underground coal gasification tenement area near Kingaroy in Queensland and has entered joint
venture discussions on future development with Metallica Minerals Limited (ASX Code: MLM).
Cougar has spent more than $250,000 on exploration to earn the 51% interest in the Designated
Area for the underground coal gasification (UCG) project on Queensland coal lease EPC882 held
by Metallica.
The Designated Area has been set aside for the development of a commercial UCG project, which
is planned to commence with the construction of a 40 megawatt (MW) power plant fuelled by gas
supplied by underground coal gasification.
The UCG process enables deep coal deposits (more than 100 metres below surface) to be
converted in situ into a synthetic gas which is recovered via production wells for use as a fuel in
power generation. Syngas can also be used in the manufacture of a range of petroleum products.
Under the terms of the exploration agreement between the two companies, Cougar has now
advised Metallica of its intention to increase its equity to 70% with the expenditure of a further
$500,000 within the next two years.
The parties have begun negotiations for the preparation of a Joint Venture Operating Agreement
under which the Kingaroy UCG Joint Venture Project within the Designated Area will be developed.
Managing Director, Dr Len Walker, said today, “Cougar has identified sufficient coal reserves to
support the development of a 40MW power station on the site, with the potential of expanding this
electricity generating capacity to 200MW in the longer term.”
“Cougar is currently planning the sophisticated drilling and testing program that will provide the
data required to design the initial production stages of a UCG project,” he said.
“This site characterisation program is expected to commence in the third quarter of 2007.”
Cougar and Metallica will also be respectively exploring for additional deep (for UCG potential) and
shallow (for open pit potential) coal deposits within the Tarong Coal Basin. Metallica is currently
evaluating the open pit mining potential of its 100% owned Taabinga coal resource on the western
side of the Designated Area.
Cougar has commenced the preparation of an application to the Queensland Government for a
Mineral Development Licence (MDL). The MDL has been selected to cover an area of
approximately 7.6 square kilometres, within which a recent drilling program defined an area of at
least 2.5 square kilometres containing a coal seam with a minimum 11.8 metres thickness at a
minimum depth of 157 metres.