Pan Asia Corporation Limited (ASX:PZC) Signed MOU With Chinese Mining Company Regarding The TCM Coal Project

Perth, May 13, 2010 AEST (ABN Newswire) - Pan Asia Corporation Limited (ASX:PZC) are very pleased to announce the signing of a Memorandum of Understanding ("MOU") between PT TransCoal Minergy ("PT TCM") and Zhongding International Engineering Co Ltd ("ZIEC") covering the TCM coal project in South Kalimantan, Indonesia.

Headquartered in Nanchang, China, ZIEC has been recognised as one of the world's top 225 international contractors and has considerable mining experience in Indonesia and Asia more broadly. ZIEC's experience in the field of underground coal mining in Indonesia is of particular relevance to the TCM coal project, for which the Company has previously stated its ambition to establish an underground mine, targeting production of at least 1.5 Mtpa in 2012.

Under the MOU, the parties have agreed that ZIEC will provide advice on drilling and project development matters with an emphasis on underground mining at the TCM tenement.

Subject to the completion of additional drilling to define the ultimate resource tonnages and the undertaking of a feasibility study, the MOU provides that ZIEC may, subject to establishing a fair commercial market price and contingent on assisting with project development finance, undertake the underground mining operations and become the majority owner of the project.

Upon completion of the Company's acquisition of Innovation West and the execution of final transaction documents between Innovation West and PT TCM, in relation to which a memorandum of agreement has already been executed, the Company would acquire ultimate ownership of a minimum of 75% of the TCM project.

CEO Alan Hopkins commented "This early strong expression of commercial interest in the TCM underground project by a group with long experience in underground coal mining is another terrific step forward after the recent announcement of a maiden JORC resource. We do however anticipate additional strong interest as it is still early days for this high value coal project".

For the full Pan Asia Corporation announcement including pictures at the signing of the Memorandum of Understanding, please view the following link:

http://www.abnnewswire.net/media/en/docs/62848-ASX-PZC-491059.pdf

Contact

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