A PROSPECTIVE COAL MINE IN NSW FIRES UP THE MARKET Sydney -...

A PROSPECTIVE COAL MINE IN NSW FIRES UP THE MARKET

Sydney - Friday - June 26: (RWE Aust Business News)
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OVERVIEW
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Old King Cole was a merry old soul, so it goes, and it should
apply to Coalworks Ltd (ASX:CWK) following the market's reaction to a
successful development on its coal prospects.
The shares shot up 5.5c to 25.5c and reached a high of 30c after
the announcement that it has made a successful application and will start
the process to obtain its exploration licence in the Vickery Coal South
coal area of NSW.
The area is prospective for semi-soft coking coal and export
thermal coal.
Coalworks's managing director and CEO Andrew Firek said the
addition of semi-soft coking coal, combined with export quality thermal
coal projects, strengthens Coalworks's asset base and prospects
considerably.
"This project has the potential for both open pit and underground
resources with nearby rail access in an emerging coking coal province,"
he said.
"Prospectivity is enhanced by its close proximity to an existing
operating semi soft coking coal mine."
In 2008 the NSW Department of Primary Industries (DPI) invited
parties to submit expressions of interest for exploration licences in
restricted coal release areas.
Coalworks was required to submit a conceptual exploration and
mine development program to the DPI based on existing knowledge of the
coal seams in a competitive tender process against other mining
companies.
The area lies south of the Whitehaven coal mine.
The Gunnedah Basin is becoming a major coal-producing area
following interest from international coal and resource companies
including Rio Tinto, BHP Billiton and major Japanese company Idemitsu.
Initial interpretation of seismic survey line data bolsters
modelled seam continuity.
Initial seismic survey interpretations conducted by Velseis Pty
Ltd have recently been received for all three survey lines conducted
across the northern section of Coalworks's Oaklands project (EL 6861)
where drilling to upgrade the 760Mt of Indicated and Inferred Resources
(classified according to the JORC code) to a Measured status is being
conducted.
The seismic survey was highly successful in outlining the
continuous draped nature of the seams on all three lines surveyed.
Drill hole geological logs and down hole geophysical survey data
has been used in the interpretation of the seismic data along these
transects.
Three survey lines form a fence block through the area of the
current drilling campaign and confirm the continuous nature of the coal
seams.
Minor small scale faulting has been recognised along each
transect, though these show little disruption to the continuity of the
seams.
The location of the faults is accurate to +/- 15 metres.
Commenting on the seismic survey data, Mr Firek said the company
is pleased to see that the seismic survey line data reinforces the
continuity of the seam.
"We believe the potential for producing reliable blocks of coal
from future mining operations is heightened by these findings.
"We will factor this new data into mine design studies for our
bankable feasibility study currently underway," Mr Firek declared.

SHARE PRICE MOVEMENTS
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Shares of Coalworks yesterday rose 4c to 24c. Rolling high for
the year is $1.20 and low 9c. Earnings per share is 43c and
price/earnings ratio 55.81. The company has 67.7 million shares on issue
with a market cap of $16 million.
Back in November at the time of the company's first annual
meeting Mr Firek told shareholders it was a time of unprecedented and
troubled time in Australian and world financial markets.
"Some analysts are predicting the situation will be far-reaching
and prolonged, and recovery may not be seen until later next year or even
2010/11.
"However, whether we see improved share prices for Coalworks and
other quality mining sector companies, next month, next year, or 2010/11,
we can say with confidence, that this will not affect the development of
our resources and the asset building of our company," Mr Firek told the
meeting.
"Our fundamentals are sound and we are in strong position to grow
and move forward."
Coalworks's corporate objective has been to build the asset
backing of the company by accumulating large coal inventories and other
assets and consolidate these assets by bringing them into production and
profitability.
The company is currently developing Oaklands coal project and
produce thermal coal or value added coal products.
It is conducting resource assessment and project evaluation on
the Hodgson Vale coal project.
Coalworks has secured an offtake agreement to sell high-value
chemicals from the Ashford lime project and complete feasibility study
for the construction of a lime process plant and mine.
Currently focus is on the flagship project - Oaklands, as it sees
both in cash and management time.
It must develop Oaklands into production and the company is on
schedule to achieve this.
Shareholders were told that exploration progress at Oaklands had
produced new inferred coal resource of 640 million tonnes, more than
doubling the 280 million tons at listing, with increased coal qualities.
Analysts place valuations on coal resources depending on the
stage of resource development.
They believe 640 million tonnes provides strong asset backing to
Coalworks shares which are expected to improve with every achievement at
Oaklands.
Coalworks expects to move the project into cash flow by 2012.
The company's coal is well suited for gasification, in fact
technical reports state it is remarkably suitable for gasification.
It also has additional emerging coal projects, which will be
disclosed later in the year.

BACKGROUND
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Coalworks Ltd joined the Australian Stock Exchange list on June
26, 2008.
The company describes itself as a dynamic Australian company with
a high-growth strategy and a primary focus on coal mining and production.
Coalworks's flagship project, the Oaklands asset in NSW, covers
54 square kilometres and has an inferred and indicated thermal coal JORC
resource of 760 million tonnes.
World energy demands drive the ongoing demand and robust price
for thermal coal, regardless of market conditions.
Since listing, Coalworks has made rapid progress in defining its
large black coal resources at Oaklands and initiating the technical
studies and stakeholder relationships vital to its goal of shipping coal
in 2012.
Coalworks also owns the Ashford lime project in NSW and the
Hodgson Vale coal project in Queensland.
Technical studies are underway to conduct resource assessment and
project development for both the Ashford and Hodgson Vale projects.