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East Energy Resources Gets Busy Drilling New Idalia Coal Tenements

East Energy Resources (ASX:EER) has wasted little time commencing drilling on its newly acquired Idalia Coal tenements in the Eromanga Basin, located near East Energy's Blackall tenement (EPC 1149).

The transaction was completed in early May.

Idalia Coal has a JORC Inferred Resource of 440 million tonnes and a drill identified JORC Exploration Target in the order of 4.0 to 4.5 billion tonnes.

Before the purchase of Idalia Coal, Idalia had already undertaken and completed an extensive exploration programs in EPCs 1398 and 1399.

Significantly, drilling intersected coal seams which are interpreted to continue along strike (north and south) of East Energy's Blackall Project (EPC 1149) seams.

These two leases share common boundaries to the south and north respectively with East Energy's Blackall Project EPC 1149.

As previously reported, EPC 1149 has a large JORC Resources of 1.74 billion tonnes of thermal coal of which 627.5 million tonnes is Indicated and 1.113 million tonnes is Inferred.

Coal deposits appear to be similar to that at Blackall Project (EPC 1149).

EPC 1398 is located to the south of East Energy's EPC 1149, where Idalia has already completed a total of 40 open (chip) holes and 4 core holes for a total of 8,093m of drilling.

EPC 1399, which is located to the north of EPC 1149, has a total of 48 open and 15 core holes, which have been completed for total of 11,500m of drilling. All these holes were geophysically logged.

The results from this drilling and exploration programme have indicated that the coal deposit contained within East Energy's EPC 1149 is continuous to the north and south through Idalia's EPCs 1398 and 1399.

In addition, that the structure, seam thicknesses and coal quality are similar in nature in all three EPCs.

East Energy will now build on these results and undertake a continuation of drilling on the EPCs 1398 and 1399.

East Energy will undertake sufficient drilling to enable the estimation of a JORC Inferred Resource in EPC 1399, with the completion of a further five or six core holes remaining to be drilled.

This work is expected to be completed within the next two months, weather conditions permitting.

East Energy will then focus on EPC 1398, where they intend to drill a further 30 cored holes and 26 chip holes over the next six months or so. This is then expected to complete the resource drilling on this tenement.

JORC Resource for entire deposit

Upon completion of this exploration program, East Energy expects to have sufficient data to enable a JORC Inferred Resource to be estimated for the entire deposit covered by EPC's 1149, 1398 and 1399.

The deposit in the three combined tenements has a strike length of 95 kilometres and is 5 kilometres to 7 kilometres in width from the line of oxidation in the east to the 150 metres cover line on the western side.

"It is very pleasing to be able to get straight into drilling and exploration on these new tenements, so soon after the completion of the Idalia transaction.

"The preliminary work undertaken by Idalia has provided an excellent base for East Energy to build on and the scale of the combined deposit is remarkable - it is a very exciting time for East Energy" said Peter Tighe, exploration manager of East Energy.

Idalia transaction with Noble Group

The transaction will create one of the largest coal portfolios in Australia, the combined tenement portfolio of coal resources may have the potential to support a large scale mining operation in western Queensland.

It will also aim to provide scale for ultimate development of the resources and unlocking a new coal frontier and Basin.

As a result of the transaction, Noble Group will hold 40.93% of East Energy. The company will have access to estimated cash of A$5 - 6 million funded by Noble.