The Unst Khudag project, which is strategically located 200 kilometres from an operational multi party coal-loading facility on a major rail line, consists of two exploration licenses and one mining license covering over 59,000 hectares. The mining license covers approximately 1600 hectares.

Hunnu is targeting first production from the Unst Khudag Coal Mine in the latter half of 2010 with offtake agreements currently being discussed with Mongolian and Chinese coal users.

Exploration programs undertaken at Unst Khudag have included mapping at various scales, trenching, geophysical surveys and drilling.

A total of 39 drillholes have been completed to depths less than 100m deep. Drilling has intersected a single coal seam with thicknesses varying from 5m to 31m.

The coal seam has approximately 4m of unconsolidated overburden and dips under cover gently at 0-5 degrees.

Past trial production of approximately 30,000 tons for bulk testwork have been carried out with potential offtake partners and local utilities.

Coal analysis reveals high-quality thermal coal with quality parameters on average Qdaf = 6460 kCal/kg, ash = 13.9% and moisture content = 23.9%.

Hunnu’s shareprice rose by 11c to 64c this morning.