Surat Basin Coal Project - exploration update

14 January 2010

MetroCoal Limited (ASX-MTE) is pleased to announce it is continuing its coal exploration and evaluation work program and expects to announce a new coal Inferred Resource suitable for conventional underground mining, within the next few weeks.

MetroCoal is continuing to update the Bundi Project geological model within EPCs 1164 and 1167. This update has enabled the inclusion of drilling data recently released by Queensland Mines and Energy together with data obtained through data swaps with other companies and data from MetroCoal's earlier drilling program.

MetroCoal's CEO, Mr Mike O'Brien said "obtaining this new and valuable drill data in the Bundi area has been a real bonus for MetroCoal's work programme which should result in a new and attractive resource estimate. Importantly, the imminent Inferred Resource estimate will be achieved without using funds raised in the December IPO."

Inclusion of this data confirms correlation of the Macalister Upper Seam (MetroCoal principle coal exploration target) within the Juandah Coal Measures of the Mid Jurassic Walloon Sub group. The geological model update was intended to facilitate planning for the upcoming exploration program. However, drill data density is sufficient for estimation of an Inferred Resource compliant with the JORC Code. The updated model will assist in optimising the planned exploration program with new holes planned.

The Bundi coal deposit is down dip of the Northern Energy Ltd's (ASX- NEC) Elimatta and Xstrata Ltd's Wandoan mining project areas (see figure above).

Download the full announcement (295kb PDF).