Churchill Mining"s drilling program at the East Kutai coal project in Kalimantan, Indonesia, continues to intersect occurrences of thermal coal in multiple seams.

The company has drilled a further nine holes with seven intersecting coal seams greater than or equal to 0.5 metres in thickness. Best intercepts included 14.2 metres from 14.7 metres to 28.9 metres; 8.25 metres of coal between 18.75 metres and 27 metres; and 5.2 metres from 24 metres to 29.2 metres.

Churchill has now drilled 19 holes at East Kutai, 15 of which have intercepted coal seams ranging from 0.5 metres to 19.25 metres in thickness.

Final analysis of the last round of sampling have returned coal quality ranges with calorific values (air dried basis) ranging from 4719-5822 kcal/kg (average 5370 kcal/kg), a total sulphur range of 0.09-0.27% (average 0.13%), an ash range of 2.08-12.90% (average 4.28%) and an inherent moisture content of between 11.66-24.44% (average 16.93%).

The drilling program at East Kutai is part of verification work by Churchill designed to test the quality and continuity of coal outcrop targets identified in field work by the company's consulting groups PT Rimineco Geological and Mining Services and GMT Indonesia.

As a result of the positive results, Churchill has entered into a formal sales agreement with the owners of the East Kutai project, PT Techno Coal Utama Prima, to buy 75% of the project.

The East Kutai project area covers about 399sqkm and is situated 110 km north-west of Sangatta in the Regency of East Kutai.

Churchill has also begun an extensive ground resistivity program at its Sendawar project, also in Kalimantan, to refine targets for drilling later this year.