Killara Expands the Nunukan Coal Project in East Kalimantan

Highlights:

ASX Code: KRA

85% equity interest in a neighbouring coal

Issued Capital:
80.3M
Fully Paid Shares
38.0M
Options (Unlisted)
35.5M
Deferred
Consideration Shares
(Unlisted)

Peter Rudd
Non-Executive Chairman
Darren Misquitta
Executive Director
Robert Kipp
Executive Director

Memorandum of Understanding to acquire an

concession in East Kalimantan

Expanded project area now covers 15,103ha of

large underexplored potential coal region

Field evaluation program already underway

Killara Resources Limited (Killara or the Company) is

pleased to announce the execution of a Memorandum of
Understanding (MOU) where by the Company can acquire an
85% equity interest in a coal concession PT Prima Bahagia
Permai Sejati (PBPS) in the East Kalimantan Province of the
Republic of Indonesia at the location shown below. PBPS will
form part of Killaras (Nunukan Coal Project).

Matthew Driscoll
Executive Director
Reza Zulkarnaen
Non-Executive Director
Leah Watson
Company Secretary

Registered Office and Postal

Address:
Level 3, North building
333 Collins Street,
Melbourne, VIC 3000
T: +61 8 9200 6290
F: +61 8 9200 6291
Map 1 Project Location
www.killararesources.com

The Nunukan Coal Project now consists of three Izin Usaha

Pertambangan (IUP) Exploration concessions that cover a
combined area of about 15,103ha of the largely underexplored

Killara Resources Limited

ABN 68 132 204 561

Tarakan Basin including the Meliat, Tabul and Naintupo Formations as shown in Map 2
below.

Map 2 Nunukan Coal Project Regional Geology

Coal mining is carried out by PT Medco Energi Mining Internasional (MEMI) on its PT Duta
Tambang Rekayasa concession 6 km to the south of part of the Nunukan Coal Project. (See
ref: www.medcoenergi.com/page.asp?id=250006 and Map 2 above). Results from 389 drill
holes completed by MEMI on the concession show average coal specifications are low ash
(9%), high sulphur (3%) and high energy (6,800Kcal/Kg) for a direct ship coal product1.
Killara is currently completing a community liaison and field mapping program across other
concessions comprising the Nunukan Coal Project. Once this work is complete, Killaras
team will mobilise to the PBPS concession and conduct general reconnaissance mapping
including representative coal sampling. Success in this work would lead to more detailed
field mapping designed to identify areas for subsequent drill testing.
The PBPS concession has not been the subject of any systematic coal exploration to date.
After completing a six month due diligence program Killara will have the option to proceed
with the transaction via a series of payments based on pre established milestones which will
entitle Killara to an 85% equity interest in the PBPS concession. Pending a favourable
outcome from the six month due diligence program Killara can elect to pay US$100,000 for
the concession as an option exercise payment, upon receipt of necessary permits to enable
the conduct of exploration activities a further (US$250,000), completion of an initial resource
drilling program (US$250,000), upgrade of the concessions to production status and receipt

Coal quality results on an Air Dried basis

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of any necessary permits to enable the conduct of mining activities (US$250,000),

completion of a feasibility study and a decision to mine (US$1.65 million) and
commencement of commercial production (US$2.5 million). The total payable should Killara
elect to proceed through each of the milestones is US$5 million.

Executive Director Mr Darren Misquitta commented on the signing of the MOU as follows
We are very happy to be expanding this project and this acquisition represents a significant
step in becoming the dominant player in the immediate region.
Yours faithfully,

Darren Misquitta
Executive Director
For Investor Information, please contact:
Matthew Driscoll
Head of Investor Relations
PH +61 3 9629 3898
Mobile +61 417 041 725
Indonesian Mobile: +6281252566042
Web:
www.killararesources.com

About Killara Resources Limited

Killara is an ASX listed exploration company with gold projects in Western Australia (Ora Banda)
and Indonesia (Gapura), coal interest in Indonesia (Nunukan) and manganese in West Timor
(Belu).
The Company has a very well developed network of business contacts in the Republic of
Indonesia through which it is offered a range of resource projects for potential acquisition and/or
joint venture.
Projects being evaluated cover a range of commodities including manganese, coal and gold
amongst others.
Competent Persons Statement
Exploration or technical information in this release has been prepared by Mr Tully Matthews Bsc,
who is a full time employee of Killara Resources Limited and a Member of the Australian Institute
of Mining and Metallurgy. Mr Matthews has sufficient experience which is relevant to the style of
mineralisation 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 Matthews
consents to the release being issued in the form and context in which it appears.
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