Churchill doubles coal resources in E. Kutai to 3.18 billion tons

UK mining firm Churchill Mining has more than doubled its thermal coal resource at the East Kutai Coal Project (EKCP) in East Kalimantan to 3.18 billion tons from previously reported JORC compliant resource of 1.4 billion tons.

?The balance is expected to be upgraded into JORC compliant categories within a month, once final digital survey data has been processed. A further announcement will be made at this time,? the company said on Monday.

Churchill has so far defined a 18 km long and approximately 3 km wide coal system. To date only 30 percent of the EKCP area has been drilled and the existing resource remains open along strike.

The latest resource update was derived from a total cumulative drilling of 40,900 meters, including 14,200 meters of open hole and 26,700 meters coring in 287 drill hole locations. The drilling focused in the north-eastern areas of the Investama Resources block and the north-western areas of the Ridlatama Tambang Mineral block.

Coal quality in the latest round of drilling is similar to previous drill samples with the coal defined as medium calorific, with low sulphur and low ash content, it said.

Due to the large size of the deposit, Churchill has focused its mine and infrastructure planning to create a bulk mining operation producing up to 20 million tons of coal per annum. The company has also set a new JORC reserve target of 500 million tons to support this production level; the original target was 150 million tons.

To date, the company has completed many of the preliminary technical and Indonesian statutory procedural requirements to ensure mining can go ahead. This technical build-up will continue for the rest of 2009 so that the EKCP is ready for development financing and/or joint venture partnership next year.

Tender documentation for some of these long-lead infrastructural items will be sent to interested parties in coming months, it added

Churchill also confirms it has recently obtained approvals and mining licenses for the EKCP from the Indonesian Government.

Churchill acquired a 75% stake in the EKCP project in 2007 and has since been aggressively drilling the area for sub-bituminous thermal coal. (denny)