Cokal updates C. Kalimantan coal project
Thursday, July 31 2014 - 12:11 PM WIB
EXPLORATION
BBM Project
BBM?s Production IUP covers an area of 14,980 hectares (ha), immediately adjacent to BHP Billiton?s Juloi tenement, straddling the Barito River and has multiple seams of high quality metallurgical coal
During the Quarter further detailed geological survey mapping in and around proposed BBM open pits Pit-01, Pit-03, and Pit-04 was carried out. Survey results are described as follow:
a. Detailed geological mapping in Pit-01 recorded a total of 76 coal outcrops with thickness ranging from 0.20 ? 1.80 m. Outcrops of seam group A, B, C, and D indicated thickness ranging from 0.40 ? 1.80 m.
b. Detailed geological mapping in Pit-03 recorded a total of 85 coal outcrops with thickness ranging from 0.20 ? 1.60 m. Outcrops of Seam J indicated thickness ranging from 1.25 -1.57 m. A rider seam located above J seam has also been mapped with thickness ranging from 0.20 ? 0.56 m.
c. Detailed geological mapping in Pit-04 recorded a total of 26 coal outcrops with thickness ranging from 0.20 ? 1.60 m. Outcrops of Seam J indicated thickness ranging from 1.36 -1.60 m. A rider seam located above J seam has also been mapped with thickness ranging from 0.20 ? 0.40 m.
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. The AAK project area comprises of 5,000ha and the AAM project comprises of 10,000ha.
Applications for the Exploration Forestry Permit (IPPKH) and Clean and Clear Certificates continue to be processed. Drilling is planned to commence once the Forestry permit for exploration activity is issued.
SNR Project
Applications for the Exploration Forestry Permit (IPPKH) and Clean and Clear Certificate continue to be processed.
Drilling is planned to commence once the Forestry permit for exploration activity is issued.
PROJECT DEVELOPMENT
BBM DEFINITIVE FEASIBILITY
Following the release of the BBM Project Definitive Feasibility Study (DFS) during the previous quarter further costing, delivery confirmation and price enquiries have been carried out confirming the accuracy and robustness of the DFS Previously the Study had confirmed that the BBM coal mine and associated transport system can be developed as a low capital cost operation with moderate to medium range operating cost. The DFS has identified that BBM?s relatively low ash, low volatile, low sulphur, low phosphorus coking coal would command a high value as a blending feed in the premium coking coal market.
MINING
Discussions are continuing with several reputable mining contractors for the initial 2Mtpa direct shipping operation with positive responses from all groups reflecting contactors? spare capacity due to the softness of the thermal coal market.
HAUL ROAD
Based on the detailed design of the entire haul road route from the BBM mine site to the Purnama Barge loading jetty including the final bridge designs, all cut and fill quantities and identification of certain selected naturally occurring building materials along the route a Request For Quotation (RFQ) was issued to three respected contractors. Responses to our (RFQ) for the Haul Road Construction were received and are in agreement with the rates and pricing used in the Definitive Feasibilty Study (DFS).
Further technical and commercial clarification meetings were held with the three respected civil construction contractors allowing contractual arrangements to be finalised expeditiously at the appropriate time.
BARGE LOADING FACILITY
We have received earthworks pricing for the Purnama Barge Loading Facility, which was part of the Haul Road Construction Request For Quotation submitted to prospective road construction contractors during this Quarter. The estimates were in line with the costing in the Definitive feasibility Study
RIVER BARGING
Our barging joint venture partner MDM Meratus in conjunction with Cokal has confirmed a ?short list? of suitable shipyards for the construction of both the tugs and barges in China and Indonesia. Final detailed design is being completed and preparations are currently underway to place construction orders with the shortlisted shipyards once funding has been finalized
Since obtaining the Port location approval, work has commenced on obtaining design and construction approval of the facilities. The design and construction approval application will be submitted to the Department of Transport in Q3 2014.
RIVER TRANSLOADING STATION
Design and costing are completed on the river based transloading station to transfer coal from the river barging system for the upper Barito, to ocean going barges for delivery to offshore customer vessels via floating crane transhipping systems.
Final selection of the site of the transloading stockpile facility is currently being carried out and near completion with a number of potential sites available.
ENVIRONMENTAL REHABILITATION
Cokal continued last quarter to undertake environmental monitoring on site as part of ongoing baseline studies.
As part of the sustainability program Cokal established a service agreement with appropriately licenced contractors to collect and remove hazardous materials from site to be taken to appropriately licenced recycling or disposal facilities. Last quarter approximately 200 excess fuel and oil drums associated with exploration and development activities were collected from the on-site hazardous materials storage and taken to facilities located Banjarmasin for recycling.
Rehabilitation activities have continued over the last quarter with activities concentrating on finalising the rehabilitation of the exploration drill pads and access tracks, the riverside buffer area and the site access road.
The on-site nursery was expanded during the quarter to cater for the increase in progressive rehabilitation activities. At present there are approximately 5,000 plants in the on-site nursery to be used as part of the rehabilitation activities programmed for next quarter.
APPROVALS & EXTERNAL RELATIONS
BBM PRODUCTION APPROVAL ADVANCES ? UPDATE
Cokal received the Izin Princip Ijin Pinjam Pakai Kawasan Hutan or ?In-Principal Forestry Permit? for its BBM Project. The In-Principle Forestry Permit is the last stage prior to the issuance of the ?Borrow and Use of Forest Area Permit (Ijin Pinjam Pakai Kawasan Hutan (?IPPKH?)) which allows the Company to start construction and mining.
The In-Principal Forestry Permit has been issued for an area covering 1,242 ha which enables the development of the port, haul road and the initial development of the mine site once the conditions of the InPrincipal Forestry Permit are met.
Cokal has now commenced finalizing the administrative processes, including the pegging of the In-Principal Forestry Permit boundary area. In addition to providing written undertakings regarding the payment of relevant taxes and rehabilitation, Cokal will spend the next Quarter completing the pegging of the Borrow and Use Forest Area. The timing on this will mainly be driven by the boundary pegging which requires approximately 2,000 concrete boundary pegs to be put in place at the boundary of the 1,242 ha operational area; however, it is expected that the pegging process will be completed in Quarter 3 2014.
Detailed land owner and land use mapping continued last quarter at the port and along the haul road corridor. Mapping of the port area and preparation of the necessary purchase documents has been completed. Approximately 25 kilometers in the northern half of the haul road corridor has no land owners identified and no domestic land uses present as the area is within forestry use areas. As such Cokal does not anticipate having to purchase land in this area. Of the remaining 25 kilometers where domestic land use and land ownership is present, approximately 10 kilometers of the corridor was mapped last quarter.
Mapping of the remaining area within the haul road corridor will continue next quarter and mapping of the first development areas within the mine area will commence.
BBP PRODUCTION APPROVAL ADVANCES - UPDATE
The finalization of the upgrade of the IUP exploration to an IUP production / operation (Mining Lease), by the Murung Raya Regency Government, continued during the last Quarter. Some minor amendments were required in the application arising from discussions with the Murung Raya Mines Department. These amendments were completed and the administrative process and the issue of the IUP production / operation (Mining Lease) are now expected to be completed in Quarter 3.
Cokal has submitted its application for the Clean and Clear Certificate Exploration from the Director General of the National Mines Department formalising the previous award of Clean and Clear status. As reported previously award of the Clean and Clear certificate has been delayed due to workloads in the Mines Department.
Cokal has had ongoing discussions with the Mines Department and it is now expected the granting of the certificate will occur in Quarter 3 2014.
TBAR EXPLORATION FORESTRY PERMIT
Whilst obtaining the In-Principal Forestry Permit for BBM has been the focus of Cokal activities over the last quarter, Cokal continued to progress the Exploration Forestry Permit for TBAR with the Central Kalimantan Provincial Government. Site visits by the Provincial Government are expected to occur during Quarter 3 2014 with the issue of the Provincial Government technical recommendation expected early Quarter 4 2014. (end of excerpt)