Equatorial to start coal production next month
Tuesday, August 19 2008 - 02:14 AM WIB
Alam Duta is expected to produce 1 million tons of coal per year for the next 4 years.
?Based on the current pricing for thermal coal, we expect the Alam Duta mine to be cash flow positive by the end of this calendar year and we continue to look for similar permits to Alam Duta to enable us to grow EQX?s net cash as quickly as possible. This will position us for the development of some of the other permits we have in the Mega Coal portfolio that we believe will be shown to contain 20+ million tonnes of coal.? EQX?s Managing Director Jim Dracopoulos said.
On 6 May 2008, EQX signed an agreement with its Indonesian partner PT. Mega Coal lndomine (Mega Coal) to invest US$2.5 million to take a 51% interest in the net profits from production of coal from the Alam Duta permit.
The development of the mine has been carried out by mining contractor PT. GSB Resources. Work has progressed well with construction of roads, accommodation, offices and workshop almost complete, it added.
According to the company, a bulk coal sample is currently being analysed so that it is ble to provide guaranteed quality specifications to prospective buyers. The coal has the quality that is being actively sought by a range of Asian markets including China, the Philippines and South Korea as well as India.
Based on the drill core samples from Alam Duta and from adjacent leases, coal quality is likely to average 33% total moisture, <4% ash and <0.3% sulphur, with calorific value likely to be around 5,300-5,500 kcal/kg on an air dried basis (adb). (denny)