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The Tabalong Coal Project, located in South Kalimantan, Indonesia, was added to Haddington’s portfolio in September 2007 through the acquisition of Minvest International Corporation.

The project comprises of two Kuasa Perambangan (KP’s) located in the coal bearing area of the Tanjung Formation in the province of South Kalimantan. The KP’s (Mining Permits) are held by PT Suryaraya Permata Khatulisitwa (PT SPK) and PT Suryaraya Cahaya Cemerland (PT SCC) and cover 1,993 and 4,315 hectares respectively.

The two adjacent KP’s cover an area of 63km2 and are located in the Tabalong district. This region of Kalimantan has been the focus on intense exploration for coal, resulting in numerous occurrences of high grade coking coal products as well as high energy thermal coals, both of which can attract premium market prices.

Information gathered at Tabalong indicates a high calorific, low ash and medium to high sulphur coal type. Initial geological interpretation indicates that 2 separate coal sequences extend along the entire strike length of the KP areas. Each of these sequences contains several separate groups of seams.

Field mapping done during the December quarter found 104 outcrops, of which 19 had previously been identified. 13 samples were collected and analysed by PT Geoservices in Balikpapan. The sample results are as below:

No. 1 Thickness Mass Received Air Dried Losses Residual Moisture
% 		Total Moisture
% 		Moisture
% 		Ash
% 		Volatile Matter
% 		Fixed Carbon
% 		Total Sulphur
% 		Calorific Value
(cal/g) 		Crucible Swelling Number
(m) (g) ar adb ar adb adb adb adb adb adb daf
1 1.02 5,730.7 3.88 5.84 9.5 5.8 3.2 43.3 47.7 2.04 7,479 8,219 1
2 1.52 5,664.9 3.86 9.37 12.9 8.7 2.2 40.4 48.7 0.69 6,965 7,817 1
3 1.70 3,893.3 10.62 7.29 17.1 8.4 4.0 39.7 47.9 1.58 7,022 8,016 1
4 1.13 5,160.4 5.16 12.25 16.8 11.6 1.6 39.4 47.4 0.58 6,447 7,427 0
5 1.21 6,585.1 5.52 6.81 12.0 6.6 3.6 40.6 49.2 2.22 7,237 8,059 3½
6 1.60 5,727.1 8.56 10.11 17.8 13.6 4.9 36.3 45.2 0.79 6,148 7,544 0
7 1.15 5,210.1 6.06 8.75 14.3 11.4 1.5 38.5 48.6 1.20 6,734 7,731 1
8 1.37 5,749.8 5.68 14.70 19.5 17.4 3.9 35.2 43.5 0.44 5,609 7,127 0
9 1.60 4,698.7 6.93 11.18 17.3 15.4 1.9 36.6 46.1 0.72 6,454 7,804 1
10 1.31 4,866.8 4.91 9.75 14.2 13.4 0.9 38.9 46.8 0.83 6,801 7,936 1
11 1.10 4,052.5 5.41 13.15 17.8 15.2 2.2 39.2 43.4 0.86 6,369 7,711 1
12 1.31 6,566.8 11.04 12.41 22.1 18.0 1.0 37.7 43.3 0.35 6,428 7,936 1
13 1.50 5,608.4 6.17 14.22 19.5 18.5 2.4 36.0 43.1 0.75 5,935 7,503 0

Note: ADB - Air Dried Basis AR - As Received DAF - Dry Ash Free

The analytical results confirmed earlier indications of high calorific, low ash and medium to high sulphur coal type. Assay results were requested for Crucible Swelling Number (CSN) to ascertain whether the coal has any coking properties for metallurgical use.

Drilling commenced at Tabalong on 19 November 2007. The drill program consists of a series of open holes drilled in pre-planned transects, perpendicular to strike (Line 1 in the south through to Line 29 in the north). Drilling was carried out by Haddington subsidiary PT Asiadrill Bara Utama and geophysical logging by PT Velseis Indonesia, also a Haddington subsidiary. Drill supervision was provided by the company’s geologists based in Jakarta.

Drilling started in the southern KP (PT SCC) and moved north to the northern KP (PT SPK) and was directed towards identifying sufficient coal resources to warrant further evaluation for development.

By March 2008, 137 holes have been drilled for 6,142m and 157 coal seam intersections. Geological interpretation defines six seams (A to F) outcropping in the east of the KP’s and dipping generally around 30 degrees to west. The strike of the seams is from south west to north east. A structural fault appears to separate the northern and southern sections of the 2 tenements that make up the project.

Recent drilling has shown that two thicker seams, A and B, increase in thickness in the northern section. Assessment of drill logs and geophysical logging is being carried out to ensure that the thicker seams are not attributable to localized structural influences e.g. reverse faulting causing seam repetition. Further drilling around this area is underway to determine seam geometry and structure.

Recent seam thickness results could have a marked effect on the size of the Tabalong resource.

In the coming months exploration will be focused on completing exploration drilling to the northern boundary of the project, proving the extent of the thicker coal intervals and continuing coring the thicker coal intersections to obtain samples for analysis.

Evaluation of infrastructure requirements, including road routes, is being carried out to identify the extent of road upgrades and creek crossings required for transport of coal to the Barito River.

We expect that by the end of June , sufficient geological data and road information will allow a decision to progress the project to prefeasibility. This depends on completing the current drilling objectives, receiving initial analytical results, updating the geological model, calculating resources and initial haul road planning.