Cokal updates C. Kalimantan coal project
Monday, February 3 2014 - 07:26 AM WIB
EXPLORATION
BBM Project
BBM?s Production IUP covers an area of 15,000 hectares (ha), immediately adjacent to BHP Billiton?s Juloi tenement, straddling the Barito River and has numerous outcrops of bright coal. Coal core samples from ongoing exploration drilling in the Eastern Block of BBM indicate the eventual conversion to premium coking coal with Crucible Swell Numbers (CSN) values generally 9 or more.
During the quarter up to five drill rigs have been active on the BBM project. Activities have focused on delineating Coal Resources in the KLM area at the eastern extremity of BBM tenement.
The KLM dulling program confirmed the geological interpretation showinj the J Seam dominating the shallow coal outcrops as a result of gentle folding of the J Seam. A cross-section demonstrates the folded nature of the geology. The J Seam outcrop in the central part of the BBM Eastern Block forms a sync line until the J Seam outcrops to the east (in the KLM area) where it forms an antic line causing the seam to outcrop again further east and dipping away to the east.
An upgrading of the Coal Resources for BBM is being finalised, and an independent review of the draft report is being conducted. The report will be compiled in accordance with the latest JORC Code (2012) and will be due for release in the March quarter.
The KLM outcrop area which lies in the far eastern area of the BBM project was accessed ?via the construction of all-weather access road system allowing the utilisation of high capacity drill rigs capable of drilling up to 400 metres (m) deep boreholes with HQ core.
On completion of the delineation of the J Seam in the KLM area, the drilling rigs were demobilised to Cokal's base camp near the Barito River.
A bulk sample of the J Seam was acquired using an excavator. A 400 kilogram sample was taken from a depth of about 10m and the sample was sealed and shipped to Brisbane where they will be prepared for testing in a large pilot coke oven. The resuls will determine the coking properties which are required for marketing the coal to the Asian steel markets, including CSR (Coke Strength), and CR1 (Coke Reactivity).
Tambang Benua Alam Raya (TBAR) Project
Cokal is acquiring 75% of the TBAR Exploration Licence which covers an area of 18,850ha, normal Government approvals are now being obtained for the acquisition. TBAR is listed on the Central Government?s ?Clean and Clear? (CNC) List. TBAR adjoins the southern and eastern boundaries of BBM, and consists of the same coal-bearing Haloq Sandstone Formation.
Geological mapping of TBAR continued, with about 75% of the area completed in detail. This work has delineated 70 coal outcrops to date indicating the potential to define a significant shallow open cut coal project.
The laboratory results of all coal outcrop channel samples continues to confirm a low ash, medium volatile matter, low sulphur, ultra-low phosphorus and a high swelling coke index, indicating a potential coking coal product of premium export quality.
BBP Project
No exploration activity was conducted on BBP during this period as all drilling and exploration resources have been deployed to BBM to assist in the delineation of the coal seam in the KLM area.
AAM and AAK Projects
Cokal has a 75% share of Anugerah Alam Katingan (AAK) and Anugerah Alam Manuhing (AAM) projects also located in Central, Kalimantan, Indonesia. The AAK project area comprises of 5,000ha and the AAM project comprises of 10,000ha. Applications for the Forestry permit (IPPKH) continue to be processed. Drilling is planned to commence once the Forestry permit for exploration activity is issued.
SNR Project
Applications for the Forestry permit (IPPKH) continue to be processed. Drilling is planned to commence once the Forestry permit for exploration activity is issued.
PROJECT DEVLOPMENT
BBM Definitive Feasibility Study Progressing
The BBM Project Definitive Feasibility Study (DFS) progressed well during me quarter; the aim is to deliver a fully designed and costed project to a high level of confidence. It is expected to be released shortly. The DFS is focused on the initial 2 Million tonnes per annum (Mtpa) start-up phase. All approvals and government processes have been submitted to allow development of an operation of up to 6Mtpa capacity.
The DFS is being optimnised to ensure tile delivery of a low capital and low operating cost, high quality coking coal project at BBM.
Mine Design
Detailed mine design and costing which was commenced in late 03 2013 is substantially complete to coincide with tile DFS completion. This work focused on a detail mine plan based on tile J Seam outcrop area, the KLM area and the BCD seams near the Barito River.
Detailed discussions are currently underway with several reputable mining contractors for the initial 2Mtpa direct shipping operation. Responses and interest has been strong and at present all groups seem to be able to meet the company?s time frame for production as most mining contractors have spare capacity due to the softness of the thermal coal market.
Haul Road
Detailed design and costing of the entire haul road route from tile BEM Mine site to the Pumama Barge loading jetty on the Barito River is completed. This included the final bridge design and geotechnical investigations for botil the bridges at Osorn and Babuat rivers. An hydrological review has also been undertaken to confirm bridge design parameters. The full design covers all cut and fill quantities and identification of certain selected naturally occurring building materials along tile optimum route.
A land usage and ownership survey for the approximate 57 kilometres (km) of haul road has been completed successfully with positive contributions from the local government and local land owners.
Barge Loading Facility
Land acquisition arrangements for the Pumnama Port are underway with the majority of the 150 ha site being identified as available and appropriate for acquisition. Very significant contributions were made by tile local community, land owners and local government to ensure this result. The loading facility is based on successfully operating facilities tailored for shallow draft hopper barging system's.
Geotechnical investigations have been completed for both the on-shore and off-shore components. The final earthworks design and costing have been completed.
River Barging
Detailed studies of the river have been completed confirming the practicality of using a river based shallow draft barging system. A detailed specific push tug and barge combination design to suit the identified navigable channel has been produced. Detailed design is completed on beam, draft and propulsion components of tile barging system and also suitable experienced and capable ship yards have been identified both in Indonesia and offshore. Preliminary work has commenced on producing an GPS river navigation system.
A barging Joint Venture (JV) agreement has been executed with a well-respected and experienced Indonesian barging company, MDM Meratus Line.
An operating draft of 2m has been confirmed for this project at approximately 3,000 tonne (t) loads. The barges can be loaded so that at deeper river depths approximately 7,000t loads can be transported.
The Local Government has approved the location of the barge loading facility, with the Environmental Approval allowing 6Mtpa throughput.
APPROVALS &EXTERNAL RELATIONS
BBM Production Approval Advances - Update
Cokal has applied to the National Forestry Department to upgrade the BBM Forest Utilisation Approval permit (exploration stage) (Ijin Pinjam Pakai Kawasan Hutan or IPPKH) to Forest Rent Use Permit (Operation / Production stage) for its BBM Coal Project. During the last quarter Cokal received full written approval from the Governor of the Central Kalimantan Government and the National Mines Department. Written advice has been received from the Forestry Department that the necessary technical requirements have been met for the IPPKH to be granted. It is expected that the IPPKH will be granted by the Minister for Forestry in the March Quarter 2014.
Once granted, the upgraded forestry permit will enable construction of the BBM coking coal project to commence. In line with the integrated development of the BBM project. The application to upgrade the forestry permit includes the forestry areas associated with the development of the BBM mine, haul road and river barging terminal.
Approval has been obtained from the Regency government mines inspector for the location of both the explosives magazine and fuel storage facilities. Applications for the final design approval for the explosives magazine and fuel storage facilities have been submitted with formal approval expected in the 2014 during the March Quarter.
Cokal has received full approval for the BBM river barge loading facility location from the National Transport Minister. Approval of the facility design has commenced.
Cokal has received a CNC Certificate Production /Operation from the Drector General of the National Mines Department formalising the previous award of CNC status.
The boundary marking of the BBM concession has been completed and formally presented to the Murung Raya Mines Department. This boundary marking is a condition of the concession and a prerequisite for the issue of the Forest Rent Use Permit (Operation / Production stage).
BBP Production Approval Advances - Update
After receipt of the approval of its Environmental Impact Study (EIS) by the Central Kalimantan Provincial Government Environmental Agency (Badan Pengelolaan Lingkungan Hidup (BPLH)) for its BBP Project, the finalization of the upgrade of the IUP exploration to an IUP production / operation (Mining Lease), by the Murung Raya Regency Government, has commenced.
Cokal expects to have the upgraded IUP for BBP from the Regency Government~n the March 2014.
Cokal has submitted its application for the CNC Certificate Exploration from the Director General of the National Mines Department formalising the previous award of CNC status. Granting of the certificate is expected in the March 2014.
TBAR Exploration Forestry Permit
Cokal has commenced the process of obtaining the exploration forestry permit, and written approval from the Murung Raya Regency Government has been obtained. Significant progress has been made by the Central Kalimantan Provincial Government in assessing the application with a provincial site inspection due during the early part of 2014.(end of excerpt)