Cokal updates C. Kalimantan coal project

The following is an edited excerpt from Cokal Limited's quarterly report released on Tuesday.

BBM Project
BBM covers an area of 19,920 ha, immediately adjacent to BHPBilliton?s Julol tenement, straddling the Barito River and has numerous outcrops of bright coal. Another Cokal tenement, BBP, covering an area of 13,050 ha, is located adjacent to BHPBilliton?s Maruwai tenement.

Cokal has previously confirmed high quality premium metallurgical coal at its BBM project and the latest results continue to support this.

Drilling has utilised conventional triple-tube HQ coring, providing 63mm diameter core. All samples have been packaged and transported by air courier to ALS?s laboratory in Brisbane, Queensland, within 5 to 6 days of core recovery. This ensures the Total Moisture results reflect the in-situ coal moisture and that the metallurgical properties have suffered minimal degradation due to oxidation.

Jim Middleton, Cokal?s Managing Director, said one the most remarkable features of the results was the in-situ coal quality. The coal has very attractive attributes being very low in impurities while containing the right metallurgical attributes which steel makers are seeking.

?The low in-situ ash content indicates there is a reasonable opportunity that a direct ship style operation can be developed, avoiding the need to construct a coal washing plant which would involve significant time and capital, this is indeed a distinct advantage? he said

While the drilling program continues we will focus on advancing the necessary engineering studies to understand some of the more critical issues involved in taking the project into production.?Middleton said.

BBP Project
BBP (Borneo Bara Prima) project north east of BBM cover 13,050ha and is adjacent to BHP Billiton?s Maruwai tenement. Geological mapping was completed last quarter and this lead to the identification of a number of drilling targets.

During the quarter, drilling camps were established and manning and infrastructure requirements were completed. An additional two drilling rigs were secured for use on the BBP project. These rigs commenced drilling during the month of December, 2011.

AAM and AAK Projects
Cokal has a 75% share of Anugerah Alam Katingan (AAK) and Anugerah Alam Manuhing (AAM) projects also located in Central Province, Kalimantan, Indonesia. The AAK project area comprises 5,000m hectares and the AAM project comprises 10,000 hectares. Mapping and preliminary exploration work continued during the quarter.

In addition to the above projects, tne company remains active in evaluating other possible opportunities in Kalimantan. (end of edited excerpt)