The Directors of C @ Limited (CEO) are pleased to announce that they have progressed negotiations on the Sale and Purchase Agreement to acquire 8 coal licences located in the South Gobi province and the adjoining Ovorhangay province in southern Mongolia, covering a vast area of approximately 625km. Execution of the Sale and Purchase Agreement is expected in the next 3 ‐ 4 weeks.
As part of its technical due diligence on these licences, CEO successfully undertook an exploration drilling program where it intersected three coal seams on the Ovorhangay licences. The first hole produced a significant coal seam thickness of 60m from surface and was followed by a second hole located 280m away, which also intersected a significant coal seam 40m thick commencing at 89m in depth. A further hole was drilled approximately 6km northwest from the second hole, which also intersected coal at 38m depth for 12m.
Due to time constraints and the extensive area of land under licence, exploration work on the South Gobi licences remained limited. Furthermore no infill drilling was able to be undertaken between the coal intersections on the Ovorhangay licence. It still remains unclear if the potential coal bearing sequence in these intersections form part of the same coal seams and geological structures, or are completely different structures.
Initial raw coal quality tests at both Mongolian and Australian laboratories have confirmed high quality coking properties, likely to be enhanced by washing. Discussions are underway to secure a drilling rig for Phase 2 of the exploration program.
Once the Company has acquired the Mongolian coal licences, it intends to immediately commence a substantial exploration program to bring the licences up to a JORC resource. Predominate focus will be given to the Ovorhangay licences. Exploration works will start with C @ Ltd conducting an extensive geophysics program which will provide critical information on the structure and will support drilling targets.