Cokal completes purchases of additional stakes at C. Kalimantan coal projects

Australia-listed coal firm Cokal Ltd announced on Wednesday the completion of the previously announced arrangement to purchase an additional 10% of both the Bumi Barito Mineral (BBM) and Borneo Bara Prima (BBP) projects. The purchase of the additional equity will bring Cokal?s ownership of the two projects to 60%.

Our exploration program at the BBM project has progressed well enabling us to continue to expand quickly. There are currently four drill rigs operating across the project and we are on track to define an initial JORC compliant resource in the near future?. Said Jim Middleton, Managing Director and CEO of Cokal.

Planning and initial groundwork is also well advanced at BBP and this will enable drilling on BBP to commence in the near future.

Cokal has paid US$8,000,000 plus issued 1,000,000 ordinary shares in Cokal Ltd . Under the terms of the transaction Cokal has purchased an additional 10% of the shares in the two PMA holding companies PT Bumi Barito Mineral and PT Borneo Bara Prima.

Cokal has previously confirmed high quality premium metallurgical coal at its Bumi Barito Mineral (BBM) project in the Indonesia territory of Central Kalimantan.

BBM covers an area of 19,920 ha, immediately adjacent to BHPBilliton?s Juloi tenement, straddling the Barito River. BBP covering an area of 13,050 ha is located adjacent to BHPBilliton?s Maruwai tenement.

We are very happy that we have been able to increase our equity in these two important projects as the results to date continue to meet our expectations. We have expanded our team on the ground by employing more geological staff ahead of further planned expansion of the drilling program? Middleton said.

Cokal Chairman Peter Lynch said ?Independent marketing advice received by the company supported the belief that these coals will be highly sought after due to their attractive attributes?

?We believe they will complement other coals becoming popular in modern coke making blends.? Lynch said.

?We have received strong interest from some of the world steel industry?s biggest participants.

?They are motivated to support the potential for a new metallurgical coal basin which allows them to diversify their current raw material supply away from the existing limited geographic locations which are dominated by the major coking coal producers?

?Although Indonesia has recently become the largest exporter of thermal coal in the world, the metallurgical coal potential of Central Kalimantan is yet to be realised.

?Kalimantan is located favourably in a geographic sense, being on the doorstep of the world?s largest and strongest growing markets,? he said. (romel)