Cokal sets 350 million tons exploration target on BBM Eastern Block

By Ruli Setiawan

Australia-listed coal firm Cokal Limited, has reported to set an Exploration Target1 on the Eastern Block of the 60 percent owned Bumi Barito Mineral (BBM) project ranging from 200 million tons to 350 million tons based on the coal occurrences in the area and includes coal of less than 200m depth of cover.

The Eastern Block comprises 8000Ha or 40 percent of the entire 19,920Ha of BBM project IUP, which is east of the Barito River located in the regency of Murung Raya, Central Kalimantan.

The Exploration Target1, said the company, excludes the 60 million tons maiden Inferred Resource of high quality premium metallurgical coal announced in December 2011, comprising 60 percent coking and 40 percent Pulverized Coal Injection (PCI) types of coal. The resource covered 8 percent of BBM, which is located immediately adjacent to BHPBilliton?s Juloi tenement. Subsequently, in May 2012, Cokal released drilling results confirming additional high quality premium coking coal in the ?J? seam at the BBM project.

?The Exploration Target1 has been reported in accordance with the ?JORC Code? and provides a view on the potential scale of the opportunity at the BBM Project. The Eastern Block Area of BBM has been the focus of our exploration activity at BBM and with four drill rigs in operation drilling progressively towards the eastern boundary,? said Cokal?s Executive Director Pat Hanna, adding that exploration target is current to June 17, 2012 and coal seams with thickness less than 0.3m were excluded from the Exploration Target?s estimation.

The current borehole data, together with down-hole geophysical logs and seam outcrop mapping, indicates that there are at least 13 coal seams in the eastern part BBM project area and have been labelled alphabetically from Seam A at the base of the stratigraphy, up to Seam M.

The seams range in thickness from 0.2 to 1 .5m and typically consist of bright coal occasionally interlaminated with a carbonaceous mudstone parting. The coal itself is often described as ?bright with minor dull bands? due to its high vitrinite content. The coal is soft (generally with HGI >90) and easily broken.

From Seam A to Seam I, the interburden thicknesses between the coal seams in a single horizon generally vary from 1.5m to 22m. While above Seam I, the interburdens were not clearly defined as the data is predominantly based on the outcrop data. The seams dip to the south and southeast, ranging from 5 to 15 degrees, averaging 10 degrees.

Borehole cores for Seams A, B, C, D have been analysed and produced two coal types within the BBM East area, a coking coal and a PCI coal. The coals are typically low Ash (4% to 8%), low Sulphur (0.2% to 0.4%) and ultra-low Phosphorus (0 to 0.003%). The coking coal typically has a good Swelling Index of 8 to 9 and volatile matter in the range of 18% to 20%. The PCI coal, on the other hand, has very high Carbon content (80% to 85%), due to the low Volatile Matter (around 10%).

Occasionally, one or two seams develop a thin stone band which may increase the ash content to the range of 9% to 14%. This additional ash is readily removed to reduce the ash to 5% for a greater than 85% yield. It is believed that a simple beneficiation plant would be sufficient to remove this stone at little cost to the operation. Analyses are underway to study various beneficiation technologies to determine the cost effective method suited to this coal.

?As we progressively continue our exploration activities towards the east, we are uncovering more premium coking coal and a lesser proportion of PCI coal which is related to a very localised igneous intrusion near the Barito River. Coal to the east of this feature tends to be premium quality coking coal, and this was re-enforced by the results reported recently in the J seam,? Hanna said.

Editing by Audy Zandri