Challenger signs Indonesian coal mining, marketing agreement
Tuesday, February 5 2013 - 02:08 AM WIB
TSE-listed Challenger Deep Resources Corp., through its wholly owned Indonesian subsidiary, PT Bestindo Energy, has entered into an exclusivity agreement relating to the right to mine and market coal from the KEM coal project in Central Kalimantan, Indonesia.
The company said in a statement received Monday that agreement with CV Kara Elmas Madenleri (KEM) gives Challenger the exclusive right, for a period of sixty days, to conduct due diligence on the KEM coal project and to enter into a mining operation - production agreement for the project. The mining operation - production agreement will give Challenger full control of all coal production and marketing within the KEM project area.
KEM owns 100 percent of the KEM coal project which is located in the Murah Teweh district of Central Kalimantan. The KEM project is located 12 kilometers east of the Barito River , the main river transportation route for the area.
The KEM project covers 335ha with an IUP operation production license in place. KEM is a multi-seam high-quality thermal coal project with existing infrastructure in place to enable an early start to production. Infrastructure in place includes a 12km haul road and loading jetty.
Coal can either be sold FOB barge at the jetty site or transhipped further downstream to a stockpile for later, direct loading on the Mother Vessel for shipment to the final consumption markets.
The company has staff onsite to complete due diligence, to begin mine plan drilling and to prepare infrastructure agreements. The mining operation - production agreement with KEM is planned to be signed later this month.
"This is a very important development for Challenger", states Ranjeet Sunder, President and CEO of Challenger. "The KEM Project gives us the potential to generate near-term cash flow which will provide funding for our Tabang Project development and will enable us to capitalize on other high-quality opportunities, while minimizing dilution to our shareholders during these difficult capital markets. We view this project as having very low risk and relatively low capital requirements which are both key elements in our Indonesian coal strategy" .
Editing by Reiner Simanjuntak