RE: NEWS!!Nothing really new, but glad to see we finally put some NR on the american medias.
Press Release Source: East Energy Corp.
East Energy provides corporate update
Thursday May 24, 9:00 am ET
Inferred resource estimates announced for major metallurgical coal deposit in China
TSX-V symbol: EEC
VANCOUVER, May 24 /CNW/ - East Energy Corp. (the "Company" or "East Energy") is pleased to report on recent progress at its metallurgical coal project in China. Shortly after announcing a deal to acquire majority ownership of Qinghai Sinomine Resources Development Ltd. (QSRD) in stages from China Minmetals Corporation, the Company filed a Technical Report outlining initial inferred resource estimates for portions of the Zhong'ao Joint Venture land holdings, which are covered by the East Energy-China Minmetals partnership agreement. Current in-place metallurgical coal resources, independently prepared by Norwest Corporation in compliance with National Instrument 43-101, include 172.7 million tonnes of inferred resources suitable for surface mining.
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Inferred Coal Resources
Initial resource estimates have been completed for three of the four blocks included in Zhong'ao. The 43-101 report calculates that there is an inferred resource of 172.7 million tonnes of metallurgical coal, which is potentially surface mineable. East Energy's 12.74% share of this inferred resource is 22.0 million tonnes of metallurgical coal.
"This initial resource calculation underscores the enormous potential of Zhong'ao and emphasizes the importance of our ownership in QSRD," said Howard Ratti, President and CEO of East Energy. "China is growing and modernizing at a rapid pace, creating a huge, local market for our metallurgical coal in the Chinese steel industry. East Energy is currently reviewing further drilling requirements in an effort to outline additional resources at Zhong'ao, which will be updated in future technical reports. We remain committed to rapidly monetizing our current holdings and continue to seek opportunities in China and North America."
The Zhong'ao JV properties are located in the Jiangcang Coal Basin, which is situated 300 kilometres (186 miles) northwest of Xining City, the capital of Qinghai Province. This is a major coal basin hosting 1.7 billion tonnes of metallurgical coal according to estimates released by the Chinese government. The Qinghai government is actively encouraging investment and is showing its support by investing in power lines, rail connections and road upgrades, among other initiatives in the Jiangcang coal area. In addition, several mining companies are active in the area.
There are a number of metallurgical coal seams in the area and the resource calculation in the Norwest report is based upon two coal seams, the No. 16 and No. 20. The average thickness of No. 16 and No. 20 are 3.7 meters and 13.6 meters respectively. Seams No. 16 and No. 20 contain medium-volatile Bituminous coking (metallurgical) coals, which are used in the local steel industry. The seams are similar in coking characteristics and near the higher volatile range boundary of the Coking Coal classification system. As a Canadian comparison, the coal is described as similar to higher volatile seams found in southeast British Columbia.
China's Steel Industry
China's steel industry has been the world's largest for over ten years. The country's use of metallurgical coal has significantly increased because of a sharp rise in the production of raw steel over the last decade. Between 2000 and 2006 alone, China's annual raw steel output increased from 125 million tonnes to an estimated 425 million tonnes.
Metallurgical coal is an essential ingredient for iron and steel production. Two-thirds of global steel production comes from iron made in blast furnaces that use coal. In 2005, 1.13 billion tonnes of crude steel were produced around the world, using about 664 million tonnes of coal, according to the World Coal Institute.
Global metallurgical coal prices have been on the rise in recent years and are significantly higher than for lower-grade coals used, for example, in power plants. This provides miners of metallurgical coal versus lower-grade coals with higher revenues for a comparable investment.
Joint Venture Details
On March 15, 2007, East Energy announced a joint venture agreement with China Minmetals Corporation, one of China's largest corporations, to acquire a 49% equity interest in Qinghai Sinomine Resources Development Ltd. (QSRD), a 100%-owned subsidiary of China Minmetals. The Agreement contains provisions that allow East Energy to increase its ownership to a majority position subject to required approvals. The Joint Venture Agreement is subject to approval by the TSX Venture Exchange and Chinese regulatory authorities.
QSRD currently holds an exploration license in the Qinghai Jiangcang Metallurgical Coalfield and a 26% equity interest in Zhong'ao Energy Co, Ltd. (Zhong'ao).
Zhong'ao controls four blocks of metallurgical coal in the Jiangcang Coal Basin. One mining license has been granted to Zhong'ao and one block is currently being surface mined.
The Technical Report was prepared by Norwest Corporation and authored by G.R. Jordan (P.Geol.) and Robert F. Engler (P. Geol.). The full report is available on SEDAR (www.sedar.com) and the East Energy web site (www.eastenergy.com).
About East Energy
East Energy Corp is a Canadian junior mining company engaged in the acquisition and development of coal properties in China and North America. The Company is primarily involved in the metallurgical coal market and has a strong focus on China. East Energy holds a purchase option to acquire majority ownership of Qinghai Sinomine Resources Development Ltd. (QSRD) in stages from China Minmetals Corporation. QSRD currently holds an exploration license in the Qinghai Jiangcang Metallurgical Coalfield and a 26% equity interest in the Zhong'ao Joint Venture in the Jiangcang Mining Area of China's Qinghai Province. The members of the joint venture hold exploration licenses for four blocks of property in the area, as well as a mining license permitting the extraction of 900,000 tonnes per year. Additional information is available on the East Energy web site at www.eastenergy.com.
ON BEHALF OF THE BOARD:
"Howard Ratti"
Howard Ratti
President and CEO
East Energy Corp.