Coal Fe reports Indonesian coal projects update
Monday, November 1 2010 - 04:33 AM WIB
INTRODUCTION
The September Quarter saw the Company continuing the development of the PT Pancaran Abadi project ("Abadi Project") under the Joint Venture arrangement with PT Toba Jaya and the commencement of coal production from the Abadi Project.
Although the high level of rainfall during the quarter has inhibited works at the Abadi Project mine site, the first trial shipment is being targeted by mid November and negotiation on quantity contract to take place thereafter.
PROJECT REVIEW
PANCARAN ABADI PROJECT
The Pancaran Abadi (?Abadi?) Project is located in the district of Muara Badak and Anggana, Sub Province Kutai Kartanegara, in the Province of East Kalimantan. The area of the concession was adjusted marginally from 1,017 Ha to 996 Ha in the final Mining, Operation and Production Licence (Izin Usaha Penambangan Operasi Produksi or ?IUP? in compliance of the new Law on Mineral and Coal Mining No. 4/2009 in the Republic of Indonesia), owing to the requirement of providing the necessary buffer zone for the existing gas pipeline in the vicinity. Of this total concession area, the completed drilling program covered 300 Ha. The remaining 696 Ha is presently unexplored.
The Mining, Operation and Production Licence (IUP Operasi Produksi) provides the necessary authority to carry out the full scope of coal mining activities encompassing construction, production, processing, transportation and sale. The Mining, Operation and Production Licence expires on 10 September 2025.
The concession area lies in Selo Lai Village, District of Muara Badak, Regency Kutai Kartanegara, Province East Kalimantan, Indonesia The concession area can be reached from Balikpapan by land transportation to Samarinda and thence continued to Selo Lai village. The exploration area is relatively easy to be reached by 4WD vehicles.
Previously, on 3 March 2010, the Company announced the completion of resource modelling and estimation and review in accordance with JORC guidelines.
This estimate was carried out following completion of the second phase drilling at the project between March and May 2009 with a total of 50 additional drill-holes penetrating to a typical depth of 50-100m from surface. The additional drilling was located within the main project area of about 300 Ha located in the south-western portion of the overall concession area. All holes were electronically logged for density, resistivity and width.
Activities during the September Quarter
The September Quarter saw the completion of the opening of the first coal pit in accordance with the designed mine plan by PT. Toba Jaya, our joint venture partner. Coal production commenced within the quarter.
The construction of the Abadi private jetty and stockyard has also commenced in the quarter with landfill moving into its advance stage, The private jetty with crushing facility is expected to be commissioned before the end of the year.
The high level of rainfall during the period under review has hindered the works on site. Nevertheless, the Company expects the first trial shipment of coal to take place by mid November with the use of the neighboring jetty.
PALAPA PROJECT
The Palapa Coal project is a 100 Ha project located upon the western margin of the island of Sulawesi. The regional geology is similar to that observed in Kalimantan with moderate coal production coming from the south western corner of the island.
The project is located within the administrative boundaiy of the Banti Village, Kecamatan Baraka, Kabupaten Enrekaug. South Sulawesi Province and can be reached by two wheel or four wheel drive. Ujungpandang city is approximately 300 kilometres from the project area.
Coal FE has not been able to proceed with work on the 100 Ha Palapa Project during the period. This is due to outstanding obligations under the license that are to be fulfilled by the owners of CV Palapa. Coal FE has negotiated with the owners to allow Coal FE to explore another concession that has been granted to the owners whilst the owners settle its outstanding obligations stated under the license for the Palapa project. The new concession area is known as Palapa 2 project.
Palapa 2 project is a 2,946 Ha concession area located next to the Palapa project and has been offered to Coal FE at initially no cost to the company to cany out exploration activity. An exploration license has been issued for the concession area which expires on 1 November 2008 and can be renewed once payment is made for the extension.
Activities during the September Quarter
Due to the present lack of funds the drilling activity will continue once more funds arc raised. The exploration license will also be extended provided payments are made for its extension.
ANDALAS PROJECTS
The Company (through its subsidiaiy, PT Techventure Indocoal) has a 70% interest in four (4) Indonesian companies, which currently holds exploration licenses for iron concessions in Central and West Sumatra. Indonesia. Details of the iron concessions are as follows:
The concession areas can be reached by daily flight from Jakarta to Padang (1 hour and 30 minutes). From Padang the journey continues by car (4 hours drive) through the well-paved Trans-Sumatera highway to a village called Air Manggis (about 10 minutes by car from Lubuk Sikaping, capital city of Pasaman regency). From Air Manggis Village there is another one hour walk to Sariak Laweh Hill with a moderate to steep slope.
Activities during the September Quarter
Preliminary survey work on the Andalas projects has been kept in abeyance until the raising of further funds to undertake a complete exploration activity on the Andalas projects. (end of excerpt)