Caledon Resources plc Quarterly Report for period ending 30 June 2009

Caledon Resources plc Quarterly Report for period ending 30 June 2009

Cook Mine Operations
Raw coal production was in line with the corresponding period in 2008 however saleable coal production was slightly higher due to washing raw coal on hand at the end of March 2009. Year to date sales are now running ahead of the previous guidance of a minimum of 400kt for 2009 and are now forecast to be in the range of 450-500kt.

As forecast in the last Quarterly Report, Cook’s coking coal contract price fell by a similar amount to the reported US$172 fall in the headline coking coal price between BHP and its Japanese customers. As a result the new annual contract price beginning in April is approximately US$107/t. 

Minyango
As announced in the Quarterly Report dated 23 April 2009, the Company is carrying out an infill drilling program at Minyango. The focus of this program is to improve the knowledge of coal quality, Resource definition, and gas content and drainage characteristics.

Five holes were drilled during the quarter for a total of 1,312 metres. Composite samples from these holes are being prepared for coke testing with the results expected to be available late in the third quarter. A total of A$819,000 was spent on Minyango during April to June.            

Bow Energy Ltd is the holder of the ATP 1025P licence, which enables it to explore for coal seam gas over an area that includes Minyango. Caledon and Bow have entered into a data sharing arrangement whereby the results from Caledon’s five holes and one of Bow’s are shared. Under the arrangement Bow will also contribute to the cost of one of the Caledon holes.

Strategic Review Process
As previously advised, Caledon has engaged RBC Capital Markets to conduct a strategic review including soliciting further interest in the Company and its assets. This Process is actively ongoing and the Company is currently involved in discussions with a number of parties. Shareholders are advised to take no action at this time. Any further announcement will be made as soon as appropriate.

Jos Simson will follow up with calls shortly. An Arbuthnot Securities research note is also attached, highlighting a target price of 80p and recommending Caledon as a strong buy.


As forecast in the last Quarterly Report, Cook’s coking coal contract price fell by a similar amount to the reported US$172 fall in the headline coking coal price between BHP and its Japanese customers. As a result the new annual contract price beginning in April is approximately US$107/t. 

Minyango
As announced in the Quarterly Report dated 23 April 2009, the Company is carrying out an infill drilling program at Minyango. The focus of this program is to improve the knowledge of coal quality, Resource definition, and gas content and drainage characteristics.

Five holes were drilled during the quarter for a total of 1,312 metres. Composite samples from these holes are being prepared for coke testing with the results expected to be available late in the third quarter. A total of A$819,000 was spent on Minyango during April to June.            

Bow Energy Ltd is the holder of the ATP 1025P licence, which enables it to explore for coal seam gas over an area that includes Minyango. Caledon and Bow have entered into a data sharing arrangement whereby the results from Caledon’s five holes and one of Bow’s are shared. Under the arrangement Bow will also contribute to the cost of one of the Caledon holes.

Strategic Review Process

As previously advised, Caledon has engaged RBC Capital Markets to conduct a strategic review including soliciting further interest in the Company and its assets. This Process is actively ongoing and the Company is currently involved in discussions with a number of parties. Shareholders are advised to take no action at this time. Any further announcement will be made as soon as appropriate.

Jos Simson will follow up with calls shortly. An Arbuthnot Securities research note is also attached, highlighting a target price of 80p and recommending Caledon as a strong buy.

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