INDONESIA - Leighton to develop East Kutai coal project

Churchill Mining has signed an agreement with Pt Leighton Contractors Indonesia to develop the East Kutai Coal Project in Kalimantan.

A Heads of Agreement between Churchill’s Indonesian operating subsidiary, PT Indonesia Coal Development, and Leighton details the framework by which the two will work together to facilitate Churchill’s plans to bring East Kutai into production.

Leighton will advise Churchill as it continues to develop engineering, procurement and construction solutions for the Fast Track Operational Mining Study (stage 1) and the Long Term Infrastructure and Mining Study (stage 2) for the project.

In May 2007 Churchill agreed to purchase a 75% interest in East Kutai from PT Techno Coal Utama and has has extended the size of the project by 200sqkm by acquiring a 75% interest in the abutting tenements to the west from the Investmine Group of Indonesia.

In 2008 Churchill announced a 1.4 billion tonne JORC compliant resource at East Kutai with resource drilling continuing along with detailed scoping and pre-feasibility work.

Leighton is part of Leighton International Limited, which is part of the Leighton Group – Australia’s largest contracting and project development group which also includes Thiess, John Holland, Leighton Contractors, Leighton Asia, Leighton Properties and Henry Walker.

As part of the agreement Leighton will prepare and submit contractual, technical and financial proposals for Churchill to consider. In return, Leighton will be granted a preferred contracting party status for the provision of the stage 1 and stage 2 works and for the mining operation stage subject to the final proposals submitted by Leighton being deemed competitive by both Churchill’s own team and its technical consulting group, Trans Tek Engineering.

The Leighton group is vastly experienced in the global coal mining industry and is now the world’s largest contract miner. The group’s subsidiary companies have a very strong presence and wide operating experience in Indonesia. Leighton is contracted to operate the Wahana, MSJ and MHU coal mines in Kalimantan.

Churchill’s managing director Paul Mazak says: “Joining forces with Leighton, a highly reputable player with vast experience in the Indonesian coal sector, is a major step forward for Churchill. It ensures that we bring tremendous level of technical expertise to the East Kutai development. Leighton’s contribution will be instrumental in the months ahead as we move into production.”

www.churchillmining.com

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