Hunnu Coal has announced it has been granted an option to acquire an 80% interest in the Erdenes Thermal Coal Project in the Dornogobi province of south eastern Mongolia. The Project is located 380 km from Ulaanbaatar and 56 km from an operational multi party coal loading facility on major rail line.

George Tumor, Managing Director, said "the Erdenes Coal Project is strategically located in a producing high quality thermal coal basin, where mines can be quickly brought into production to deliver thermal coal to both domestic and Chinese export markets." The company has an exploration target of 40Mt to 60Mt for the Erdenes Coal Project based on existing exploration work.

Exploration work carried out in the northern part and southern part of the license at the Erdenes Coal Project included 60 cubic metres of pit sampling and a single drill hole to 12.5 metres depth.

Erdenes Thermal Coal Project average pits’ depth was three meters and coal was detected in six of the pits. Drill hole DH49 intersected an eight metre thick coal seam from 1.5 metres depth.

A total of five samples (taken from one drill hole and 4 pits) were analysed by the company for basic coal parameters and results showed high quality coal seams (Q = 5,120 to 7,310 kCal/kg; S = 0.11% to 0.63%; Ash = 14% to 38.5%; moisture content = 8.6% to 12.4%).

 Hunnu Coal is currently planning an active exploration programme on this project and its other coal projects.

The two existing coal deposits of Khashaat Khudag and the Olongiin Ukhaa in the surrounding area are respectively located 8 km to the north east of and 4.5 km to the south of the Erdenes Coal Project and host approximately 140Mt to 180Mt of coal (averaging 5,500 kCal/kg) and 80Mt to 90Mt of coal.