The Department of Energy recently awarded a Coal Operating Contract (COC) of two coal blocks in Toledo City, Cebu on March 24, 2010. The total area covered by the contract is 2,000 hectares.

 
Central Cebu wherein the Toledo coal prospect is situated, is predominantly underlain by the previously mentioned Cebu-Malubog Formation. A strip of these sedimentary sequences traversed the property in a NW trend as observed during recent ocular investigation. The sedimentary clastics consist mostly of poorly bedded light gray shale with overlying patches of limestone forming ridges in places. The coal measures are usually found several meters from the shale-limestone contact. The sedimentary clastics cover approximately 20 percent or about 350 hectares of our property.

The coal seams noted from the existing small scale mining operation immediate adjacent to and within the property indicated a + 3 feet thick coal bed. The coal is generally lustrous black in color, moderately fractured, and with more defined bedding and dip. The coal per previous reports indicated an 11,000 BTU assay turn out.

Per accounts of local miners operating in the area, there are about seven coal seams found in the sedimentary sequence of which two seams of more than 1 meter in thickness are of economic importance.

With the initial information on hand, the geologic potential coal reserves in the Toledo Coal Project could be as high as 700,000 tonnes. This was based on the above discussed geologic condition and on the assumption that 10 % of the assumed area would yield economically workable coal deposits.