Brisbane, Mar 6, 2009 AEST (ABN Newswire) - Linc Energy Limited (ASX:LNC)(PINK:LNCYF) can report that it has increased its coal resource estimate for its Chinchilla project area which currently lies within MDL 309, EPC 635 and EPC 897.
The Chinchilla deposit is now estimated to contain a total coal resource of 775 million tonnes in accordance with the JORC code". Of this total resource,24 million tonnes are in the 'Measured' category, 383 million tonnes are in the 'lndicated' category and 368 million tonnes are in the 'lnferred' category. (See attached JORC Report for the detailed JORC estimate summary outlining the quantity and quality of the coal resource.)
This updated resource estimate shows a total resource increase of 175 million tonnes above the previous estimate made in August 2008. The total resource has increased primarily due to further drilling conducted in the southern part of the project area, which has enabled conversion of previous inferred resources into indicated resources, as well as expanding the total area of the Chinchilla project resource.
Linc Energy retains a goal of establishing a 20,000 barrels per day facility at Chinchilla to produce high quality diesel and jet fuels. That process will consume approximately 7 million tonnes of coal per annum or approximately 420 million tonnes over a 60 year period. The revised resource estimate ensures that even with extremely conservative resource recovery assumptions, a 60 year project life can be achieved.
Linc Energy's Chief Executive Officer, Mr Peter Bond said, "lt's fantastic to see Linc Energy establish a coal resource of 775 million tonnes within the Chinchilla tenement area as this now provides the Company with the resource base from which it could operate a 20,000 barrel per day UCG to GTL commercial facility at the site for over 60 years".
Linc's most recent gasification trial work at Chinchilla has also indicated that its UCG technology can recover energy by way of the synthesis gas produced that is equivalent to 20 GJlt coal (DAF basis). Based on this level of energy recovery, the revised Chinchilla resource (775 million tonnes) represents a total in-situ energy resource of over 9000 PJ.
Linc Energy will continue to seek to expand its resource position at Chinchilla over the next 24 months including assessing other coals at further depth.
Queensland Government policv on UGG trials
On l Sth February the Queensland Government announced a new policy intended to provide a clearer process of assessment and approval of commercial Underground Coal Gasification (UCG) production created by the overlapping tenement situation that was affecting the UCG and Coal Seam Gas industries.
The policy provides priority and certainty of tenure for Linc Energy's UCG project site at Chinchilla within Mineral Development Licence (MDL 309). The policy also recognises and excludes Linc Energy's proposed Chinchilla commercial site area (contained within the Company's MDL application 407).
The policy allows for the continuation of UCG trials at Linc Energy's Chinchilla demonstration facility, which includes the continuation of the Company's ongoing Gas to Liquids (GTL) trials. Following completion of all UCG pilot projects in Queensland, a report will be prepared by an expert panel and submitted to Cabinet no later than December 2011.
Linc Energy's Chief Operating Officer, Mr Stephen Dumble said, "Linc Energy has been aware of the emerging issue of overlapping coal and petroleum tenements for some time.
By focusing our initial commercial development in South Australia where our ability to undertake UCG is catered for in our petroleum tenements, we have secured our path towards commercialisation. Our efforts working with the Queensland Government have also enabled us to retain our ability to commercialise UCG to GTL at Chinchilla in the future, which is obviously a positive outcome for both Linc Energy shareholders and for Queensland".
Finalisation of QCG/BG court proceedinqs
On 22"d July 2008 Queensland Gas Company Ltd (OGC) and BG lnternational Ltd (BG) commenced proceedings in the Queensland Supreme Court naming Linc Energy as the third defendant. The proceedings concerned, amongst other things, a consent to the priority of Linc Energy's proposed commercial operations within its Chinchilla tenement area provided to the Company by Arrow Energy Ltd and Australian CBM Pty Ltd on 5 July 2008 (Arrow Consent).
This litigation is now at an end following QGC and BG consenting to the dismissal of the proceedings against Linc Energy. ln return for the dismissal consent, Linc Energy has provided an undertaking that it would not seek to have the Minister rely on the Arrow Consent as being a consent for the purposes of ss318Ao(2)(c), 31BAT(2)(b) or 3188O(lXcXii) of the MineralResources Act 1989 (Qld); an undertaking which is consistent the Company's original intention since first obtaining the Arrow Consent.
Contact
Mr Peter Bond
Chief Executive Officer
Phone: +61-7-3229-0800
E-mail: oab@lincenerqv.com.au
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