Hunnu Coal Starts Drilling at the Unst Khudag Coal Mine

Hunnu Coal Starts Drilling at the Unst Khudag Coal Mine. Hunnu Coal, Australia listed mining company, which acquired 60% of the Unst Khudag Coal mine on April 12, 2010 announced today that it commenced an exploration and development drilling programme at the mine. According to the Company, the programme intends to confirm the current exploration target of 250mn tonnes to 500mn tonnes of coal within the mining license area and to identify the extent of the coal seam into the adjacent licensed exploration area. A total of 33 drill holes are expected to be completed for approximately 5,000 metres. The findings from the exploration and drilling programme will be released in coming months, according to Hunnu Coal.
The Unst Khudag Coal mine is located 290km from Ulaanbaatar and approximately 200km from coal loading facility on the Mongolian railway. The Company has two exploration licenses and one mining license covering over 59,000 hectares of area. The Government of Mongolia approved mining plan and feasibility study for 98.7mn tonnes of coal mining from 1,600 hectares of area. The Company is targeting first production from the mine in the Q42010 and is also negotiating off-take agreements with Mongolian and Chinese thermal coal users.

In our view, Hunnu Coal is progressing in line with its announcement of becoming a major force in the exploration and development of coal deposits in the south Gobi coal province.