Cokal unveils reserve statement for BBM project
Friday, July 28 2017 - 04:21 AM WIB
ASX-listed Metallurgical coal group Cokal Ltd unveiled on Friday a coal reserve statement for economic open pit coal in the eastern portion of the Bumi Barito Mineral (BBM) coal project, Central Kalimantan Province.
The company said in a statement that the total reserve estimate 20.2 million tons (Mt) of Run-of-Mine (ROM) comprises 13Mt Proved Reserves, and 7.2Mt Probable Coal Reserves in accordance with the 2012 JORC Code.
A total Marketable Coal Reserve of 16.9Mt (US$150/t for coking coal and $112.50/t for PCI coal) has been confirmed as metallurgical coal from analyses conducted in an Australian laboratory.
?The economic analysis of BBM?s Coal Resources indicated that with additional drilling to convert Inferred Resources to Indicated or Measured Resources, there is potential to delineate additional Coal Reserves,? Cokal said in the statement.
The J Seam Reserves (5.5Mt Proved and 3.2Mt Probable Product coal) is 100 percent coking coal. In the case of Seams B, C and D, 3.0Mt Proved and 1.1Mt Probable is Coking Coal Reserves, while 2.4Mt Proved and 1.7Mt Probable is PCI Reserves.
Economic Reserves were determined by using the Definitive Feasibility Study which was prepared in 2014 by Resindo, and recently updated to reflect reduced fuel costs and depreciation of the Rupiah in November, 2016.
Geotechnical analysis indicated that the pit slope angles of 75?, with 10m berms at every 45m depth, provided a safety factor of 1.59 which is above the minimum regulatory requirement.
In the meantime, Cokal said BBM Anak project continues towards completion of construction. The haul road from the mine site to the stockpile and the barge loading area has been cleared and formed. Drainage gutters and capping are under construction and expected to be completed shortly.
As previously reported, Timber Cruising, (otherwise known as TC in Indonesia, which is the evaluation of timber by the Forestry Dept,) was completed, as was land acquisition and compensation for all areas covered by the mine site, haul road, stockpile and barge loading area. Construction of the barge loading facility is close to completion and barges will arrive in the coming weeks, the company said.
Negotiations are well advanced for the sale of BBM Anak?s Premium low Volatile PCI coal with initial sales expected to be with domestic users such as mineral processing plants which currently import PCI coals from Australia and Vietnam.
The PCI coal in BBM Anak is included in the Reserves Estimation, and Cokal is confident that it will produce an attractive profit margin for the 10,000t per month production which is expected to commence sometime in August.
Pat Hanna, Cokal Director, said ?Although Cokal and its shareholders have had to endure a long period (over two years) of a global downturn in the coal industry, at last we can see the light at the end of the tunnel. Very soon now, Cokal will generate an income from sales of its valuable metallurgical coal and we are confident we can achieve a substantial profit margin.?
Consequently, Cokal said it is considering not to conclude the agreement for a JV partnership with IAA as announced on May 24, 2017. Development of the infrastructure for BBM Anak will form the basis of the infrastructure for the 0.5mt per annum (mtpa) BBM PCI project as both projects will use the same barge loading port, stockpile and haul road. Upgrading BBM Anak to BBM PCI will cost substantially less than the initial estimates.
Therefore, with the cash flow generated by BBM Anak, Cokal expects that it can develop the 0.5Mt per annum BBM PCI export project without third party funding, the company said.
Editing by Reiner Simanjuntak