Hunnu aims to start mining on a small scale and use cash flow to fund further ramp-ups.

But the Australian Financial Review has reported that Hunnu executive chairman Matthew Wood has a history of preparing companies for sale and “is sure to be looking for a good deal to make his 2011”.

Hunnu confirmed no specific talks had been held, or agreements entered into, with “any group regarding a takeover of the company”

“The company confirms that it is well funded and continues to aggressively explore and develop its portfolio of Mongolian coal projects,” the company said in its response to the report.

Hunnu set 89.7 million tonnes of maiden coking coal resources, including 34.3Mt measured, at its Tsant Uul project in southern Mongolia earlier this month.

The company also lifted its stake of the Unst Khudag thermal coal project in the South Gobi region by 15% to 80% in the last week of January.

The Unst Khudag project currently holds 324Mt of resources within a depth of 140 metres and an updated resource statement is being calculated.

Hunnu shares are up half a cent to $1.21 this morning.