Churchill updates E. Kutai coal project
Thursday, July 23 2009 - 08:27 AM WIB
JORC Resource Upgrade
Churchill is presently finishing the upgrade into categories of its 3.18 Billion tonne JORC-compliant resource and has experienced delays. The Company had already announced JORC -compliant classifications for 1.412 Billion tonnes (Measured 118Mt, Indicated 322Mt, Inferred 972Mt) of this global resource with the balance due to be modelled by July 2009.
The remaining 1.768 Billion tonnes is currently an Inferred resource under the JORC Code and is being moved into Indicated and Measured where appropriate. This is now expected sometime in August 2009.
Importantly, it is anticipated that the EKCP's first JORC-compliant coal reserve statement will be available within one month of the JORC category update.
Paul Mazak, Managing Director of Churchill commented:
"I am disappointed that the JORC category upgrades are taking longer than anticipated and would like to thank investors for their patience and appreciation of the vast volume of data, which needs to be analysed to make the calculations.
"Our independent consultants are currently checking through 40,000 metres of drilling and down-hole logs, coupled with approximately 2,500 coal data sets. These inputs along with a full understanding of coal quality are critical to the correlation and benchmarking of all data in readiness for the final JORC modelling.
"Churchill remains confident that the JORC-compliant resource number will support a mining operation producing 20 million tonnes per annum for a minimum of 20 years. We are making significant progress towards this target having reached a number of engineering and development milestones as well as with the appointment of David Gibbs and Andrew Davies, who bring with them significant experience in developing mines through to production."
Experienced Managers Appointed
Churchill has appointed David Gibbs as Project Manager and Andrew Davies as Technical Manager, to its Jakarta-based mining and infrastructure team as the Company continues to ready the EKCP for financing and development.
Gibbs is a highly experienced mine planning and mine manager who has worked in a direct international and consulting capacity and has considerable experience in Indonesia. Most recently, he spent three years managing, evaluating and planning a new 5 million tonne per annum coking coal mine in Central Kalimantan. Prior to this, he was Manager of Mine Planning for Bumi Resources at Indonesia's largest coal mine, Kaltim Prima Coal. His core task was to plan the expansion of KPC's operations from 17Mtpa to 54Mtpa.
Davies is an accomplished technical manager and engineer who has worked throughout the world setting up and managing systems for mines, refineries, process plants, airports and industrial buildings. Most recently, he was the project manager for an Indonesian coal mine upgrade and was responsible for the commissioning of a new overland conveyor system. Prior to this, he was construction manager for the Central Queensland Port Authority's new A$5 billion coal handling facility in Australia.
Both men will be Indonesian-based and will work from Churchill's office in Jakarta.
Engineering Milestones
Whilst awaiting final JORC-compliant numbers, Churchill has continued to move ahead with mine and infrastructure planning at the EKCP. The Company is on schedule to have a comprehensive mine-to-port feasibility study completed by the end of 2009
During the quarter to 30 June 2009, the Company continued to complete detailed engineering plans for the mine, the haulage route, the multi-flight conveyor system and the port. A peer review process of these plans will commence shortly. Concurrently, the Company has completed a detailed field survey of the haulage and conveyor routes and begun land acquisition negotiations. Churchill's geologists are currently now examining areas which will form the future supply of limestone and road base aggregate.
Geotechnical drilling in the north of the RTM block has already been completed to measure rock competency for future open pit mining. Geotechnical drilling is also now underway in the southern area of the block. Further holes will soon be drilled to sterilise an area near the middle of the resource envelope, which has been identified as the location for the coal processing plant.
Joint Venture Partners
As advised previously, Churchill continues to engage large coal and energy groups about potential joint venture opportunities at the EKCP. To date, four groups have completed extensive investigations into the project and are between 50% - 70% of their way through their respective detailed due diligence, including having appointed investment banks and others to complete valuations based on the project. Whilst these groups are substantially advanced in their investigations, Churchill can give no assurance on whether this will lead to an offer or whether any potential offer will be to the satisfaction of Churchill. The Company also continues to have ongoing discussions with a number of investment and project financing institutions. (end of release)