Pan Asia Corporation Limited (ASX:PZC) Signs MOU For Possible Expansion Of ATA Open Pit Mine Into TCM Concession

Perth, Mar 3, 2010 AEST (ABN Newswire) - Pan Asia Corporation Ltd (ASX:PZC) are very pleased to provide the following update on activities at the TCM Coal Project located in south Kalimantan, Indonesia.

As previously advised, PZC has been in discussions with the contracting company currently responsible for mining at a second open pit in the PT Arutmin ATA concession. A Memorandum of Understanding has now been signed which outlines the proposal to expand the main ATA open pit mine into the TCM concession. Upon further technical investigation, it is both parties' intention to sign an Agreement of Cooperation in the Mining and Trading of Coal (the "Agreement"). This Agreement will detail the key commercial terms, including the tonnage to be extracted, the mining rate, the timeline and the profit sharing arrangements. Importantly, the Company will not bear any capital cost associated with the development of these open pit mining operations. Further, the Company stands to significantly benefit upon the completion of open pit mining, with the finished open pit available to provide access to possible underground coal mining operations at TCM. This is likely to save significant capital expenses typically associated with developing access to these future underground operations.

CEO Alan Hopkins commented "This is a significant moment in the evolution of the Company as it is now likely to have near-term cashflow without bearing any of the capital costs typically associated with developing an open pit mine. It also enhances the potential for the development of an underground mine as access will already be available, which is thus likely to assist the economics considerably".

In order to fully evaluate the area being targeted by the potential expansion of the neighbouring open pit mine, the Company's drilling activities are now focussing on an area approximately 1.6km x 1km located adjacent to the ATA pit. The latest two holes drilled in this area returned significant coal intersections. It is anticipated further drilling will occur in this area before the drilling program continues northward.

All drilling, logging and sampling has been undertaken in accordance with industry best practice and in consideration of the JORC guidelines. All drill holes are vertical and utilise a mixture of HQ diameter open hole and triple tube coring. Coal samples are being sent to PT Intertek Utama Laboratory Services in Banjarbaru, Kalimantan. PT Intertek Utama is a fully internationally accredited coal testing laboratory. Coal quality analysis for TCM 7, 8 and 9 are expected within the coming weeks.

The Company's due diligence on the balance of the parcel of projects to be acquired from Innovation West continues actively.

Contact

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