Waratah Announces Completion of Stage 1 Infill Development Drilling Program at South Alpha

Waratah Coal announce that it has completed Stage 1 of a major infill drilling program designed to convert approximately 500 million tonnes of Inferred Resource to a Measured and Indicated status at its South Alpha Project (EPC 1040 and EPC 1079).

Waratah Coal’s South Alpha Project has recently been announced as a “Significant Project” by the Queensland State Government. Waratah proposes to develop a large scale coal mine, a 490km standard gauge railway and a new port capable of delivering 50 mtpa to export markets.

This major drilling surge represents part of the pre-feasibility study involved in the project development.

The South Alpha Project currently boasts an Inferred Resource to 3.38 Billion tonnes. The drilling program is contained wholly within the one freehold tenement (Kia Ora Station) which contains not only the bulk of the Inferred Resource but also that which appears most amenable to opencut mining.

The program consists of boreholes of 500 metre spacing with coring, seam analysis and downhole geophysics being sufficient to raise the potentially opencut areas to measured status. Upon verification these areas will have preliminary mine designs applied and reserves will be converted to proven and probable status. It is expected that this program on the C-D seams and B seams potential opencut areas will yield up to the first 10 years initial production should development of a mine proceed.

Waratah has negotiated a staged approach within the Kia Ora property which is designed to correspond to large grazing boundaries. This allows grazing to rotate as drilling proceeds. Stage 1 sees the completion of some 41 chip and partly cored boreholes which complement those which already define the Inferred Resource.

Cores have already been delivered to the Australian Coal Industry Research Laboratory for analysis. Borelogs and downhole geophysics are currently being entered into the database for modelling.

To view the figure showing the location Staged Infill Drilling Plan – Kia Ora, view this announcement on the Waratah Coal website www.waratahcoal.com

To view the figure: Kia Ora – Staged Infill Drilling Plan directly on this release, please visit the following link: http://media3.marketwire.com/docs/WCI0904_FIG1.pdf.

Stage 1 represents approximately half of the strike length for the C and D seams in the targeted opencut area. Additionally, the Inferred Resources considered too deep for opencut mining will be upgraded to Indicated status by coring at 1,000 metre spacing. If successful, this will give additional confidence for large scale underground longwall potential.

The entire program will consist of approximately 180 cored and chipped holes for a total meterage in excess of 22,000 m. Over 400 coal samples will be provided to local certified laboratories for analysis. In addition several overburden and roof and floor samples will be collected for geotechnical analysis. Two (2) top drive rigs with additional air circulation capacity are expected to complete the project by February 2009.

Waratah will also deploy a further three (3) drill rigs in the south and west of the project area with a view to extending the entire project.

An additional three (3) drill rigs are deployed in the northern tenements.

At Alpha North (EPC 1053 and EPC 1039) Waratah Coal has already identified Inferred Resources of 0.975 Billion tonnes.

Waratah’s 100%-owned Galilee licenses and applications now cover more than 15,000 km2, extending over 240km along strike to the north and south adjacent to the historical deposit as well as adjacent and down dip, to the west. EPC 1040 and EPC 1079 are just two of twenty EPCs and EPC applications held by Waratah Coal in the Galilee Basin.

To view the chart showing the Australian Thermal Coal Spot Price Ex-Newcastle, view this announcement on the Waratah Coal website www.waratahcoal.com

To view the chart: Australian Thermal Coal Spot Price Ex-Newcastle directly on this release, please visit the following link: http://media3.marketwire.com/docs/WCI0904_FIG2.pdf.

Coincidently thermal coal prices have remained firm with the Barlow Jonkers Thermal Coal Index at US$162.15 last week.

All coal Inferred Resources and targets mentioned are CIM and JORC compliant.

For more information on the Galilee Basin Coal Project, please visit the Waratah Coal website www.waratahcoal.com