Pan Asia Corporation Ltd (ASX:PZC) Updates On Drilling Activities At Roda Niaga And TCM Coal Projects In Indonesia

Perth, Jan 19, 2010 AEST (ABN Newswire) - Pan Asia Corporation Ltd (ASX:PZC) are pleased to provide the following update on initial exploration activities on two of its thermal coal prospects in Kalimantan, Indonesia. While continuing to undertake due diligence on the extensive Innovation West Pty Ltd (Innovation West) acquisition, the Company has been actively exploring the two underground coal targets at Roda Niaga and TCM in South Kalimantan.

RODA NIAGA COAL PROJECT, SOUTH KALIMANTAN

The Company has completed initial drilling of the Roda Niaga Coal Project near Batulicin in South Kalimantan. The 6,412Ha Roda Niaga concession, along with the adjoining Kusan Persada concession, form the original assets acquired by PZC prior to the current planned acquisition of Innovation West.

A total of 213m of open hole drilling and 1,090.4m of HQ core drilling was completed in five holes focussing on the north-western corner of the project. Drilling targeted the down-dip extension of coal seams mined in adjacent open pit operations with the view of identifying coal seams with potential to be exploited by underground mining methods. Coal has been intersected in every hole drilled; with seams ~ 2metres thick but containing some parting and high ash content. However, gross calorific values are moderate to high, with further improvement possible through washing. Sulphur values are generally low.

Once the drilling is completed at the nearby TCM project, the Roda Niaga Project will be reviewed further to determine the scope of any additional work. Importantly, undertaking this first drilling programme has also allowed the Company to establish a competent technical team with a now proven capacity to undertake efficient and effective drilling and exploration programs in Indonesia. This initial drill program was supervised by a representative of SRK Consulting who have also reviewed all drilling, sampling and reporting procedures. The Company's focus now moves to exploring the TCM concession, as well as the balance of the extensive portfolio of assets being acquired from Innovation West.

TRANSCOAL MINERGY (TCM) COAL PROJECT, SOUTH KALIMANTAN

Drilling activities have begun on the TCM Underground Coal Project, located approximately 16km to the north of the Roda Niaga Coal Project in South Kalimantan. The 4,148Ha concession area is situated immediately adjacent to the 2Mtpa ATA open pit thermal coal mine currently being operated by PT Arutmin Indonesia. Coal seams being mined in the ATA pit are observed dipping shallowly into the TCM concession area, with the down dip position of these seams the key focus of the current exploration drilling campaign. The ATA mine typically produces a high-quality thermal coal with high calorific values, moderate sulphur and low ash.

The initial drill program of six (6) holes at TCM aims to evaluate the south-western part of the concession, an area approximately 4.5km long and 1.2km wide. This area is immediately adjacent to the current operating area at the ATA mine. Based on the results of these preliminary six holes, the Company may undertake further infill drilling to delineate coal resources in this area, as well as continue exploration and resource drilling further to the north.

CEO Alan Hopkins said "This is a good first up result & we are now keenly looking forward to the outcome of the TCM drilling "

Variation to terms of acquisition of Innovation West

The Company wishes to advise shareholders that the consideration for the acquisition of Innovation West has been increased by an additional 25 million performance shares. As such, the share consideration is to be 630 million fully paid ordinary shares and 25 million performance shares.

For the performance milestone to be met, the vendors must enter into an off take agreement for the sale of at least 50,000 tonnes of coal to a sizable and reputable international customer at any time up to 6 months after the performance shares allotment. Upon completion of the milestone, these performance shares will be converted to ordinary shares.

The Company advises that legal due diligence on the projects / acquisition of Innovation West is ongoing and will update the market as to further progress.

The Company will seek all regulatory and shareholder approval in respect of this transaction.

For the complete Pan Asia Corporation ASX Announcement including Tables & Figures, please click the link below:

http://www.abnnewswire.net/media/en/docs/62095-ASX-PZC-477068.pdf

Contact

Alan G. Hopkins Chief Executive Officer Tel: +61-8-9381-5819