Churchill announces resource upgrade at EKCP
Wednesday, August 26 2009 - 08:38 AM WIB
The company said analysis by independent advisor SMG Consultants had upgraded EKCP?s Total Measured and Indicated Resource to 1.333 billion tones, which consisted of 556MT of Measured Resource and 777MT of Indicated Resource.
With Inferred Resource of 1.148 billion tones, EKCP?s Total Categorized Resource now totaled 2.481 billion tones, the company said.
?Churchill is confident that the majority of the Inferred Mineral Resources can be upgraded to Indicated Mineral Resources with continued exploration. SMG Consultants has also determined that additional work is required to bring a further 618 million tonnes of coal at EKCP into full JORC Inferred category status, which would bring the total resource to 3.18 billion tonnes. However, given the extremely large Measured and Indicated resource of 1.333 billion tonnes from which the JORC Reserve will derive, the Company may consider leaving further exploration work on the Inferred tonnes for a later stage,? it said.
Of major importance is the significant increase in the tonnages within the Measured and Indicated coal resource categories from which the Mining Reserve will be calculated and which has taken this combined tonnage total to more than 1.3 billion tones, it added.
"We are extremely pleased that SMGC's ongoing work has continued to demonstrate the exceptional nature of the asset that Churchill has in EKCP. These types of results confirm our confidence that Churchill will develop into a substantial coal producer," CEO Paul Mazak commented:
The upgrade to these JORC categories, especially the increase in Measured and Indicated to 1.33 billion tonnes paves the way for an initial reserve statement, which is anticipated to be announced within approximately 6 weeks. Pit design and mine planning will form an integral part of the Mining Reserve work and are ongoing.
The project feasibility work is on schedule with some 80% of the engineering completed to date. Completion of the feasibility study is still expected to be by the end of the 2009. Geo-technical drilling at the mining-pit area and ROM site is in its final phase. Geo-technical drilling will now move to various locations along the conveyor route and finally to the port site. The bathymetric survey for the port was delayed due to rough seas but has now commenced and will be completed within a matter of weeks. The Churchill technical team has completed inspections of suitable conveyor systems in the US and is now in high-level technical and financial discussions with internationally recognized engineering firms from Europe and China regarding the conveyor system.
In parallel with the ongoing feasibility work and in anticipation of a positive feasibility study, Churchill has initiated a review of three primary means of financing the EKCP project:
(1) a "standalone" strategy based on financing the project through a combination of equity and project debt;
(2) a joint venture with a strategic partner combined with project debt; and
(3) the outright sale of the project once its true value can be demonstrated through the feasibility study.
"As we continue to improve the quality of our resource base and advance our feasibility work, our confidence that the EKCP asset will result in a project with persuasive returns also continues to grow. We believe that the size of the asset, combined with the growing demand for coal in the Asian market, will yield substantial interest in Churchill from energy producers.
Once the feasibility study is completed, Churchill will be in a position to determine which option moving forward will provide its shareholders with the most attractive returns," Mazak said.
Churchill's 75%-owned East Kutai Coal Project is located in the Kutai Timur Province of East Kalimantan. The company controls 4 IUP Exploitation blocks totaling more than 350 square kilometers. Within the concession areas, the dominant geological formation is the Wahau Formation, although the Balikpapan Formation and the Batu Ayau formation also outcrop in the southern areas. (alex)