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Underground coal gasification developments in Hungary

World Coal,

Wildhorse Energy (WHE), a developer of underground coal gasification (UCG) and uranium projects in Central Europe, has released an update on its Mecsek Hill UCG project, Hungary. Multiple coal seams were intersected in Q4 2011 and the company is currently drilling the final two boreholes at the Varalja exploration target. Confirmatory holes have been drilled across the Komló, Pécs and Varalja target areas, using a mixture of poly crystalline diamond (PCD) and diamond coring techniques. On completion, the assay results will be reviewed to identify which coal seams may be most suitable for UCG.

Final site selection will follow the completion of the drilling programme and assessment of factors, including geological structure, coal suitability, land access, local infrastructure and mining layout. After site selection is completed the important next steps directly linked to the site shall be initialized, such as environmental permitting and hydrogeology studies, as well as regulatory confirmation regarding what mining licence(s) shall be required to permit the conversion of coal into syngas with UCG technology.

The final two confirmatory boreholes, CH6 and CH7, are in the Varalja exploration target area and have intersected two and three seams with UCG potential respectively. CH6 is currently at a depth of 665m and core recovery levels are above JORC requirements of 95%; CH7 is at a depth of 750m and core recovery is also above the JORC minimum of 95%. Both wells have approximately 300m of drilling left before ordering geophysics, rock mechanical tests and demobilisation. The programme is aimed at improving confidence in the large historic database, comprising approximately 558 drill holes, and to prove the resource potential of parts of the Mecsek Hills project to the internationally accepted JORC reporting standard. As announced on 25 May 2011, WHE has already delineated a maiden JORC inferred coal resource of 81 million t for the Komló target area; the updated drilling results will be announced in conjunction with the prefeasibility study later this year. 

Additionally WHE has also successfully completed a 3-D seismic programme, comprising of 15 km2 to assist UCG site selection and drill programme planning for the further development of the project, particularly in relation to a potential bankable feasibility study.

Matt Swinney, managing director of WHE, commented: “Operational progress at the Mecsek Hill project has been a high priority for WHE over the period and we are pleased to report that as we near completion of our confirmatory drilling campaign, multiple coal seams potentially suitable for UCG have been intersected”

“The profile of UCG in Central Europe was furthere heightened following encouraging comments made by Sándor Jászai, president of the Hungarian Office of Mining and Geology, in his October speech titled “The future; coal, ore and maybe gas embedded in rock”, which specifically referenced UCG as a potential energy source within Hungary. The growing recognition that UCG can potentially unlock a substantial source of domestic energy in Central Europe is an important facet in our overall growth strategy, and I believe that our first mover advantage […] will enable us to build upon our current acreage in Hungary to bring UCG technology to additional countries within the region.”

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