Linc Energy's Updgrade

  Linc Energy shares finished up 38% as the market finally got around to reading an update the company issued late last Friday night to the ASX.The shares rose 46.5c to & #36;1.69 and hit a high of & #36;1.79, still well under the all time high reached last year of well over & #36;5.It was the second update in two days from the company about its Queensland coal interests.On March 4 it reckoned it was still confident of doing a deal with Chinese interests over coal reserves in another part of Central Queensland.Friday Linc increased the estimate of a coal resource in Queensland and said a state government policy provided & quot;certainty of tenure & quot; for the project.The company said in the update its Chinchilla deposit in Central Queensland may hold 775 million tonnes of coal, 29% more than estimated last August.The company claimed that was enough to supply a 20,000 barrels-a-day coal-to-liquids project for more than 60 years.The company said that of & quot;a total coal resource of 775 million tonnes in accordance with the JORC code & quot;, 24 million tonnes are in the 'measured' category, 383 million tonnes are in the 'indicated' category and 368 million tonnes are in the 'inferred' category. & quot;This updated resource estimate shows a total resource increase of 175 million tonnes above the previous estimate made in August 2008. & quot;The total resource has increased primarily due to further drilling conducted in the southern part of the project area, which has enabled conversion of previous inferred resources into indicated resources, as well as expanding the total area of the Chinchilla project resource. & quot;Linc Energy retains a goal of establishing a 20,000 barrels per day facility at Chinchilla to produce high quality diesel and jet fuels. That process will consume approximately 7 million tonnes of coal per annum or approximately 420 million tonnes over a 60 year period. & quot;Linc Energy's Chief Executive Officer, Mr Peter Bond said, & quot;lt's fantastic to see Linc Energy establish a coal resource of 775 million tonnes within the Chinchilla tenement area as this now provides the Company with the resource base from which it could operate a 20,000 barrel per day UCG to GTL commercial facility at the site for over 60 years & quot;. & quot;Linc's most recent gasification trial work at Chinchilla has also indicated that its UCG technology can recover energy by way of the synthesis gas produced that is equivalent to 20 GJlt coal (DAF basis). Based on this level of energy recovery, the revised Chinchilla resource (775 million tonnes) represents a total in-situ energy resource of over 9000 PJ. Linc Energy will continue to seek to expand its resource position at Chinchilla over the next 24 months including assessing other coals at further depth. & quot;Linc also said in the statement sent to the exchange that a new policy announced by the Queensland government to address overlapping licenses held by underground coal gasification and coal-seam gas companies allows production trials to continue as planned at the Chinchilla project.Earlier in the week Linc said it was & quot;still in active negotiations with the Chinese counterparts concerning the purchase of its Emerald (Teresa) coal tenements in Queensland. & quot;Since Linc Energy's announcement in December, the Company has continued to progress discussions and as recently as the past two weeks, has participated in meetings in both China and Australia. & quot;Negotiations are at a very sensitive stage, the company said, with further meetings scheduled for the coming fortnight. & quot;The company said it remains positive about the prospects for finalisation of a sale in the near term and & quot;although disappointed that it has been unable to progress the transaction to a point whereby a detailed announcement could be made by the end of February, the Company will update the market as soon as it is in a position to do so, and in any event no later than Monday 23 March. & quot;The company said, & quot;it remains extremely confident of reaching a positive outcome in these negotiations. & quot;Both parties have been working tirelessly to complete the sale, but unfortunately the complexities of the transaction, the Chinese approval process and the current global financial crisis have delayed the completion more than we could have anticipated & quot;.  

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