Geo Energy completes acquisition of E. Kalimantan coal firm

By Romel S. Gurky

SGX-listed Geo Energy Resources Limited said that its subsidiary PT STT Tunas Bara had on November 18 finally completed the acquisition of 100 percent effective equity interest in East Kalimantan coal miner PT Surya Tambang Tolindo.

The company said in a statement on Tuesday that Surya Tambang is the holder of a production operations mining business license for a coal concession area of 4,600 ha located at Besiq Village, Damai Sub-district, Kutai Barat Regency, East Kalimantan Province, Indonesia,

It added that based on current exploration and technical data, the concession has a technical specification of an average calorific value of 7,200 kcal/kg (GAR) for coal classification of semicoking coal. The concession has a term of 20 years from the date of issuance of the license (in October 2012) covering the stages of construction, mining, processing, and refinery, as well as transportation and sales.

Surya Tambang has not commenced coal productions and is in the preproduction stage, Geo Energy said.

?The acquisition is in line with the group?s business strategy to expand its business operations and increase coal production levels. The acquisition will result in the group holding an aggregate 100 percent effective shareholding interest in the target (Surya Tambang), and allow it access to and control over the concession and the coal deposits located in Mining Permit Area. This in turn increases the group?s quantity of coal reserves available for production and of higher calorific value,? said the company, which first announced the acquisition plan in 2013.

Geo Energy said the consideration for the acquisition was the deposit of US$2 million paid by the group and was arrived at a willing buyer and willing seller basis and based on the current exploration and technical data for which an Independent Technical Report (as defined in the 2013 announcement) will be completed later.

Based on the current exploration and technical data on 1,200 ha of the 4,600 ha of the concession area, the estimated coal reserve is 800,000 metric tons on a strip ratio of 17.

Editing by Reiner Simanjuntak