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| |  | | | 2. Balikun Coal Project - Hami, Xinjiang, PRC Coal Location & Access The Project is located about 265 km from the city of Hami, Xinjiang, China. The mining permit covers about 29.77 km2. The project area is centered about 44°11'00"N, 92°07'23"E. The Boerqiangji Town Charcoal Colliery is about 30 km to the east of the coalfield and is connected by an asphalt road which passes through the coalfield at its eastern boundary.  Click to enlarge Location Map Geology & Mineralization The Project (also known locally as Heiyanquan Coalfield) is located in an undeveloped area of the coal rich Balikun coalfield and sits on a plateau consisting of low hills and a relatively flat plain. The elevations, in the immediate area, range from 1,700 m above mean sea level (amsl) in the SW to about 1,550 m (amsl) in the NE, with the terrain generally sloping in that direction. The property is defined by surveyed coordinates used for the 2007 exploration permit, which was replaced by a mining permit in December 2008. There is one mineable seam in the coalfield, namely the "A1", of the Badaowan Formation of Lower Jurassic age, and it appears to be of mineable thickness over 85 to 90% of the coalfield area, with unmineable thicknesses concentrated at depth and in the southern portion of the property. There are regular and predictable fluctuations, based on drilling data and seismic reflections, of thickness and a simple monoclonal structure. The type of coal found on the property is a high volatile bituminous A coal according to the United States Geological Survey terminology. In China, this same coal is described as gas coal. The 156 Coalfield Geological Brigade (Xinjiang) describes the coal found on this property as gas coal with long-flame coal and weak-glued coal appearing in incidental quantities and isolated locations. The terms "gas coal", "long-flame coal" and "weak glued coal" are local variations of the German coal classification system. There is one identified mineable seam, namely the "A1", which lies within the permitted area of the Project. The A1 seam has a total thickness ranging from 0.23 to 6.92 m and averaging at 3.30 m. The A1 seam is stable and has regular and predictable fluctuations of thickness and a simple structure. From a coal quality viewpoint, the A1 coal is at a low metamorphic stage and is mainly a gas coal, with the quality properties of very low-high ash, low-very high calorific value, very low-mid-high sulphur, low-high phosphorus and eutectic-dystectic ash, which can be used for coke making. The 156 and 161 Coalfield Exploration Brigades of the Coalfield Geological Bureau of the former Xinjiang Coal Industry Administration and the No. 1 Regional Survey Brigade of Xinjiang Geological & Mineral Bureau have conducted extensive surveys since 1958. The locations of coal seam outcrop were discovered by a pre-survey, reconnaissance, detailed survey and interpretation of concealed coal seams by 2-D seismic survey in 2006. A total of 31 boreholes (8 for extensive-detailed survey [2006], 23 for exploration [2007]) were completed, for a total of 11,702.69 m (including mechanical core drilling of 3,168.04 m [2006], 6,808.35 m [2007] and hydrological drilling of 1,043.87 m, 682.43 m in 2006 and 2007, respectively). In November 2007, the report summarizing in detail the results of the 17-month, two-part program (reconciliation and initial survey in 2006 and detailed survey in 2007) was issued by the 156 Brigade. Resource Estimate An NI 43-101 compliant resource estimate on the Project carried out by Scott Wilson was completed on February 4, 2010. Below is the table presenting the resource estimate prepared by Scott Wilson excerpted from the NI 43-101 report:
2009 Exploration Plan / Development Plan
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