Cokal unveils reserve update of BBM coal project

By Romel S. Gurky

ASX-listed metallurgical coal group Cokal Ltd unveiled on Tuesday an update to the release of a Coal Reserve statement for economic open pit coal in the eastern portion of the Bumi Barito Mineral (BBM) coal project, East Kalimantan.

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 (see Tables 1 and 2). 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 tables below demonstrate the sensitivity of the BBM project as a function of coking coal and PCI sale prices. 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.

The J Seam Reserves (5.5Mt Proved and 3.2Mt Probable Product coal) is 100% 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.

Table 1: BBM Coal Reserves by JORC Category

FOB Coking Coal Sale Price ($/Product tonne)	ROM Coal			Coking Product			PCI Product			Total Product Coal
	Proved	Probable	Prov + Prob	Proved	Probable	Prov + Prob	Proved	Probable	Prov + Prob	Proved	Probable	Prov + Prob
	(Mt)	(Mt)	(Mt)	(Mt)	(Mt)	(Mt)	(Mt)	(Mt)	(Mt)	(Mt)	(Mt)	(Mt)
110	7.9	2.7	10.6	4.7	1.3	6	1.8	1	2.8	6.6	2.3	8.9
120	9.8	4.2	14.1	6.2	2.3	8.5	2	1.2	3.3	8.2	3.5	11.7
130	10.4	4.7	15.2	6.6	2.5	9.1	2.2	1.4	3.6	8.7	3.9	12.7
150	13	7.2	20.2	8.5	4.3	12.8	2.4	1.8	4.2	10.9	6	16.9
180	14.7	11.1	25.8	9.8	7	16.8	2.4	2.3	4.7	12.2	9.3	21.5
210	15.2	12.3	27.6	10.2	7.9	18.1	2.5	2.4	4.9	12.7	10.3	23
240	15.9	13.7	29.6	10.6	8.9	19.5	2.6	2.6	5.1	13.2	11.4	24.7

Table 2: BBM Coal Reserves for Coking Coal Product

Coking Coal	Proved Reserves					Probable Reserves					Total Proved + Probable Reserves
	Product Coal (Mt)					Product Coal (Mt)					(Mt)
	Seam				Total	Seam				Total	All Seams
Sale Price	J	D	C	B	Proved	J	D	C	B	Probable
$110.00	2.4	0.9	0.6	0.7	4.6	1	0.1	0.1	0.1	1.3	5.9
$120.00	3.2	1.2	0.8	0.9	6.1	1.3	0.3	0.4	0.3	2.3	8.4
$130.00	3.6	1.2	0.9	0.9	6.6	1.4	0.4	0.4	0.3	2.5	9.1
$150.00	5.5	1.2	0.9	0.9	8.5	3.2	0.4	0.4	0.3	4.3	12.8
$180.00	6.8	1.2	0.9	0.9	9.8	5.8	0.4	0.5	0.3	7	16.8
$210.00	7.3	1.2	0.9	0.9	10.3	6.5	0.5	0.5	0.3	7.8	18.1
$240.00	7.6	1.2	0.9	1	10.7	7.5	0.5	0.5	0.4	8.0	19.6

Table 3: BBM Coal Reserves for PCI Coal Product

PCI Coal	Proved Reserves					Probable Reserves					Total Proved + Probable Reserves
	Product Coal (Mt)					Product Coal (Mt)					(Mt)
	Seam				Total	Seam				Total	All Seams
Sale Price	J	D	C	B	Proved	J	D	C	B	Probable
$82.50	0	0.7	0.7	0.5	1.9	0	0.3	0.3	0.4	1	2.9
$90.00	0	0.8	0.7	0.6	2.1	0	0.4	0.4	0.5	1.3	3.4
$97.50	0	0.8	0.8	0.7	2.2	0	0.5	0.4	0.5	1.4	3.6
$112.50	0	0.9	0.8	0.7	2.4	0	0.6	0.5	0.6	1.7	4.1
$135.00	0	0.9	0.8	0.7	2.4	0	0.8	0.6	0.8	2.2	4.6
$157.50	0	1	0.8	0.7	2.5	0	0.9	0.7	0.9	2.5	5
$180.00	0	1	0.9	0.7	2.6	0	0.9	0.7	0.9	2.5	5.1

Editing by Reiner Simanjuntak