Cokal announces positive results from scoping study of BBM project

ASX-listed Cokal Limited announced on Friday the completion of a scoping study for a proposed underground mining operation of its 60 percent owned Bumi Barito Mineral Coal Project (BBM), located in Central Kalimantan.

In March 2016, Cokal had reported a total Coal Resource of 266.6 million tons (Mt) of B, C, D and J Seams of which 19.5Mt was deemed Measured Resources and 23.1Mt was Indicated Resources in the PT BBM Coal Prospect in the Districts of Seribu Riam and Sumber Barito, Murung Raya Regency, Province of Central Kalimantan, Indonesia. These results were based on a minimum seam thickness cut-off of 0.3 meter.

The Coal Resources of Seams B, C, D and J can be economically extracted using open-pit mining and have been classified as both Measured and Indicated categories within four proposed open-pits designed in the BBM East Block.

As the remainder Inferred Coal Resources for Seams D and J are considered amenable to modern underground mining extraction methods, Cokal said in a statement it has compiled a Scoping Study report which outlines the concept and rationalization of a proposed underground mine plan for the East Block of BBM.

The seam height of the D Seam averages 1.5 to 1.4m while the J Seam varies from 1.25m to 1.3m. Therefore the overall mining height variation is generally from 1.25m to 1.5m. These seam heights are similar to those extracted at the two highest performing Longwall plow operations in the world being, Bogdanka Mine in Poland and Pinnacle in the USA.

Cokal said the roof predominantly consists of very hard sandstone (up to 95Megapascals (MPa)) while the immediate 1m to 2m of roof consists generally of a competent siltstone. This combination is ideal for extraction of the deeper Coal Resources using underground methods such as thin-seam longwall mining.

The Inferred Coal Resources in the underground mine area have been confirmed as primarily coking coal from analyses conducted in an Australian laboratory.

Cokal said because of the favorable geological conditions within the BBM area, the Scoping Study has identified the potential for four large underground mining blocks utilizing the longwall method of extraction of both the ?D? and ?J? seams. These two seams are currently delineated by Inferred Resources totaling 67 million tons (mt) within the underground mining area in the eastern portion of the BBM project tenement.

The mine is proposed to use three continuous miner development units prior and a built-for-purpose longwall plow. Similar (but deeper) mining conditions using longwall plows include Bogdanka Mine (more than 5 million tons per annum (mtpa)) in Poland and Pinnacle (more than 2.5 mtpa) in the USA. The highwall punch mine configuration and shallow nature or the Inferred Resources means

longwall output is not constrained by outbye coal clearance systems as is experienced in similar plow operations installed in existing older mines.

Sensitivity analysis indicates the underground extraction of premium quality coking coal at BBM could be highly competitive in the marketplace. The Scoping Study was conducted in accordance with the JORC Code (2012).

However, due to the restrictions imposed by the ASX on ?forward statements? including production targets, OPEX and CAPEX estimates and NPV valuations for Scoping Studies, Cokal is not able to provide any of these estimates in a public statement.

The outcome of this Scoping Study is the recommendation that the project be advanced through to a Pre-feasibility Study, the Cokal statement ended.

Editing by Reiner Simanjuntak