1In 2-quart saucepan, heat chocolate chips and condensed milk over low heat just until condensed milk starts to bubble at edges, about 7 minutes. Remove from heat, and stir until mixture is smooth. Stir in coconut extract. Pour into bowl. Cover and refrigerate about 1 hour or until set.
2Place coconut in small bowl. Shape 1 tablespoon chilled truffle mixture into a ball. Immediately roll in coconut to coat, then transfer to a plate or cookie sheet. Continue with remaining mixture, washing hands if chocolate starts to stick to hands.
3If desired, place in paper candy cups. Cover and refrigerate; serve at room temperature.