DRILLING INTERSECTS SIGNIFICANT COAL SEAMS AT TCM COAL PROJECT, KALIMANTAN, INDONESIA

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1 Hay Street SUBIACO WA 6008 P: F: ABN: February 2010 The Manager Company Announcements Platform Australian Securities Exchange Exchange Plaza, 2 The Esplanade PERTH WA 6000 Dear Shareholders DRILLING INTERSECTS SIGNIFICANT COAL SEAMS AT TCM COAL PROJECT, KALIMANTAN, INDONESIA HIGHLIGHTS: 6.62m cumulative thickness of coal intersected in TCM 3 Drilling ongoing, with several additional holes now being planned The Directors of Pan Asia Corporation Ltd (the Company ; ASX: PZC) are very pleased to provide the following update on drilling activities at the TCM Coal Project located in south Kalimantan, Indonesia. Drilling activities are currently focussing on the southern part of the TCM concession and immediately adjacent to the 2Mtpa ATA open pit mine operated by PT Arutmin Indonesia (part of PT Bumi Resources Tbk Group). The ATA mine typically produces a highquality thermal coal with high calorific values, moderate sulphur and low ash. The TCM drill program is targetting the down-dip position of the seams currently being mined in the ATA pit with the intention of building sufficient resources to justify the development of a mining operation. Two holes have been drilled at TCM to date, with the recently completed TCM 3 returning five (5) coal intersections with a cumulative thickness of 6.62m, as indicated in Table 1, below. The coal seams have few internal partings, suggesting that the coal quality analysis, expected within the coming weeks, will confirm the coal is of similar quality to that being mined in the ATA area to the west (Figure 5). All drilling, logging and sampling has been undertaken in accordance with industry best practice and in consideration of the JORC guidelines. All drill holes are vertical and utilise a mixture of HQ diameter open hole and triple tube coring. Coal samples are currently being sent to PT Intertek Utama Laboratory Services in Banjarbaru, Kalimantan. PT Intertek Utama is a fully internationally accredited coal testing laboratory. 1

2 TCM 2 did not return any coal intercepts as it was collared on the southern side of the Batulicin Fault. The thickness and depth of coal seams intersected in TCM 3 are consistent with the Company s geological interpretation, based on exposed seams observed in the ATA open pit (Figures 2 and 3). The coal seams exposed within the ATA pit appear to dip at 10 0 to the east and continue from the highwall of the ATA pit into the concession area. A major structure is known to exist in the area and the drilling has now confirmed the location of this structure. Future drilling can now be planned considering the latest geological findings. Table 1 Coal intersections in drill hole TCM 3 Hole No Latitude Longitude From (m) To (m) Interval (m) TCM Total Cumulative 6.62 The Company will continue the drilling program at the TCM Project, initially focussing on delineating the extent of this thick coal-bearing sequence over an area of 4.5km x 1.2km in the southern part of the concession. Based on the results of the remaining four proposed holes, the Company will likely infill drill this area at a closer hole spacing to enable the calculation of a resource statement compliant with the requirements of the JORC Code. Drilling will also be undertaken further to the north, initially focussing on the area adjacent to the ATA concession boundary, where there is evidence of open pit mining over a strike length of greater than 10km (see Figure 4). The Company aims to continue employing the same exploration techniques, using drilling, to locate the down-dip position of the coal seams exposed in these adjacent open pits. CEO Alan Hopkins said This is a great result from the early drilling at TCM. If we can get more results like this in the next few holes, we plan to extend the current drill program with a view to defining a resource. 2

3 Figure 1 The 4,148Ha TCM coal concession showing actual (green) and proposed (black) drill hole locations. 3

4 Figure 2 The coal-bearing formation exposed in the ATA pit. This unit can be in excess of 10m thick. Figure 3 Two coal seams are exposed in the ATA open pit. 4

5 Figure 4 Outcropping coal has been mined from shallow open pits for a distance of over 10km to the north of the ATA mine. TCM Concession Figure 5 Coal intersection from TCM 3, shown in drilling splits. Very few partings are present in this section. Yours faithfully ALAN G. HOPKINS Chief Executive Officer 5

6 Competent Person s Statement The data in this report that relates to Exploration Results is based on information evaluated by Mr Brett Gunter who is a member of The Australian Institute of Mining and Metallurgy (MAusIMM) and who has sufficient experience relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2004 Edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (the JORC Code ). Mr Gunter is a fulltime employee of GMT Indonesia and he consents to the inclusion in the report of the Mineral Resource in the form and context in which it appears. About Pan Asia Corporation Limited Pan Asia Corporation Limited is a rapidly growing diversified resources company listed on the Australian Securities Exchange with offices in Perth, Australia and Jakarta, Indonesia. The Company aims to be a major supplier of key resources into the expanding Asian markets and is well advanced in its due diligence and requirements for regulatory and shareholder approval for the acquisition of a number of significant coal and manganese assets in Indonesia. This diversified portfolio of assets includes projects in both production and exploration stages as well as a significant opportunity to participate in key infrastructure development which will complement the existing coal projects held by the Company. The evaluation and development of the current suite of assets in addition to new opportunities that arise from a strong local partner network will be the foundation for Pan Asia s aim to become a top tier coal and manganese company in Indonesia over the next three years. An extensive international financial network provides support for the Company s rapid growth plans. 6