SENDAWAR COAL PROJECT

Churchill mining announced that the company drill program at the east Kutai coal project in Kalimantan, Indonesia discovered ocurrences of thermal coal in multiple seams.

Begun drilling on the primary coal resource targets in the northern portion of the Sendawar project and plans to drill 64 new holes by February 2007. The programme, which will concentrate on the top end of the tenements, is designed to test possible seam extensions from the abutting Gunung Bayan mine onto the Sendawar ground. The Gunung Bayan project has a resource of 300 million tonnes of high-grade steaming coal and is producing at a rate of approximately 3.4 million tonnes per annum.

Deployed drilling teams to start resource drilling at rpimary coal targets. Initial pilot drilling programme and appraisal work of secondary areas was completed. A soft coking coal target area was identified.