Under the MoU, the parties have agreed that ZIEC will provide advice on drilling and project development, including a feasibility review, assistance with project development funding and the undertaking of underground mining.

The MoU at this stage is non-binding as commercial terms will not be set until after the feasibility review but it opens the way for ZIEC to acquire a significant interest in TCM post feasibility at market value.

ZIEC’s experience in the field of underground coal mining in Indonesia is of particular relevance to the TCM coal project, for which Pan Asia has previously stated its ambition to establish an underground mine, targeting production of at least 1.5 million tonnes per annum in 2012.

Pan Asia chief executive Alan Hopkins said: “This early strong expression of commercial interest in the TCM underground project by a group with long experience in underground coal mining is another terrific step forward after the recent announcement of a maiden JORC resource.

“We do, however, anticipate additional strong interest as it is still early days for this high- value coal project.”

Headquartered in Nanchang, China, ZIEC has been recognised as one of the world’s top 225 international contractors and has considerable mining experience in Indonesia and Asia.

Pan Asia’s share price was 11.5% higher at 3c this morning.