Cokal claims early works progress ahead of final forestry permit

By Ruli Setiawan

ASX-listed Cokal Limited said that it continues to make good progress with the finalization of early works ahead of the granting of the final Borrow and Use of Forest Area Permit.

Cokal announced on August 11 that Platinum Partners had extended further funding via a bridge loan to allow early work to be undertaken and thereby maintain the project schedule.

?The early works included the final detailed engineering design and contract documentation to facilitate the immediate commencement of site based construction once project financing documentation has been completed,? the company said in a statement late last week.

A significant amount of the funds advanced by Platinum Partners via the extended bridge loan were to complete the procedural matters associated with processing of the final borrow and use forestry area permit, the company said. The obtaining of this permit is a condition precedent for the provision of the full funding package. The key activities which have been occurring are:
? Survey and pegging the approved boundary and operational area, the majority of the concrete boundary pegs have been installed
? Provision of various undertakings regarding rehabilitation, a restoration area (DAS) has been established near the project and inspections of the progress have occurred.
? Payment of Applicable taxes, this has involved the detailed survey of all trees of commercial quality in the Forestry area, the compensation payable to the Forestry ministry is dependent on the actual number of these trees utilized in the area.

A report prepared by Cokal in conjunction with the inspections undertaken by forestry officials will be submitted shortly. Based on this report the Indonesian Ministry of Forestry will issue the final Borrow and use of Forest Area Permit, Cokal said.

To maintain the project schedule timeline a number of critical path construction items have been advanced through detail design and quotation. By making these items ?shovel ready? the project construction can commence as soon as the full funding package is available, the company said.
? Plotting / survey of road corridor from Barito river to BBM being carried out, 100% complete. The centerline of the road corridor has been gradually cleared and control survey marks established for earthworks cut and fill control.
? Purnama Port land mapping complete and documents prepared for compensation payments
? Some minor engineering design optimized and finalized ready for re-pricing
? Detailed Geological mapping and sampling has been undertaken with the aim of increasing the portion of Measured and Indicated Resources
? Detailed river sounding carried out:
- Dredging areas
- Purnama Port
- Puruk Cahu to Krajan
- In excess of 30Gb of data obtained and currently being processed

Elsewhere, Cokal said the company and Platinum are still finalizing the full funding package details, even though Platinum partners exclusivity period expired on October 6 the two parties are continuing to work in good faith. The terms of the financing are in line with details already released to the market. Cokal aim to have most details completed in the next four weeks coinciding with the expected timing of the removal of the major condition precedent, the issuance of the Borrow and Use of Forestry Area Permit.

BBM?s Production IUP covers an area of 14,980 hectares (ha) in Central Kalimantan, immediately adjacent to BHP Billiton?s Juloi tenement. The tenement covers ground which has been zoned as Production Forest. Production Forest zones are areas that have been designated by the Central Government of Indonesia to allow for forestry and mining activities by local and international companies.

The IUP straddles the Barito River and has numerous outcrops of bright coal. Coal core samples analysis confirmed BBM?s coal to be a premium coking coal with Crucible Swell Numbers values generally 9 or more.
? Total Coal Resource estimate of 261 Mt at BBM, comprised of 1 0.5Mt Measured, 1 3.5Mt Indicated and 237Mt Inferred Resources reported ri accordance with the 2012 JORC Code
? Resource increase attributed to the additional 'J' Seam in the KLM area which is 100% Premium Coking Coal
? Product split for the total BBM Coal Resource is estimated to be 90% Coking Coal and 10% PCI
? Product split used in the Study (approx. 20Mt) was approximately: 82% Coking Coal and 18% PCI

Editing by Reiner Simanjuntak