Golden Energy updates coal resources, reserves estimates of three concessions

By Romel S. Gurky

SGX-listed Golden Energy And Resources Limited announced that an independent qualified persons? report (IQPR) on the updated coal resources and coal reserves estimates of the group held under each of PT Borneo Indobara (BIB), PT Kuansing Inti Makmur (KIM) and PT Trisula Kencana Sakti (TKS), as at August 31, 2016, have been prepared by an independent third party coal resources and coal reserves technical consultant, Salva Mining Resources Pty Ltd.

The company said in a statement it has also commissioned Jones Lang LaSalle Corporate Appraisal and Advisory Limited (JLL) to perform an independent business valuation report on IDX-listed coal mining firm PT Golden Energy Mines Tbk (GEMS).

Summarized updated coal resources and reserves estimates and market value of BIB, KIM and TKS coal concession mines are as follows

Based on the BIB updated IQPR, the aggregate estimated amount of proved and probable coal reserves within the BIB coal concession area as at August 31, 2016 is 654.7 million tons, comprising an estimated 518.5 million tos of proved coal reserves and 136.2 million tons of probable coal reserves. The aggregate estimated amount of coal resources within the BIB coal concession is 1,819 million tons.

Based on the KIM Updated IQPR, the aggregate estimated amount of proved and probable coal reserves within the KIM coal concession area as at August 31, 2016 is 57.2 million tons, comprising an estimated 43.2 million tons of proved coal reserves and 14.1 million tons of probable coal reserves. The aggregate estimated amount of coal resources within the KIM coal concession as at August 31, 2016 is 258 million tons.

Based on the TKS Updated IQPR, the aggregate estimated amount of coal resources within the TKS coal concession as at January 15, 2015 is 77 million tons. The TKS concession does not have any defined coal reserves.

In addition, JLL had prepared the Independent Business Valuation Report in accordance with the International Valuation Standards issued by the International Valuation Standards Council. The Independent Business Valuation Report provides an opinion as to the market value of the 66.9998 percent equity interest in GEMS as at August 31, 2016 (the Valuation Date).

JLL employed the net asset value approach in the Independent Business Valuation Report. Through this approach, JLL determined the fair market value of its total assets and total liabilities of GEMS, and then calculated the difference to determine the market value.

To determine the net asset value of the coal concession areas of the GEMS Group, JLL relied upon the IQPRs issued by Salva Mining in respect of the coal concession areas of BIB, KIM and TKS, all with effective valuation dates as at August 31, 2016.

To determine the market value of the coal trading business of GEMS, JLL adopted the income approach, utilising the discounted cash flow method. Under this method, value depends on the present worth of future economic benefit to be derived from the projected income. Indications of value have been developed by discounting projected future net cash flows available for payments of shareholders? interest discounted to their present worth.

Editing by Reiner Simanjuntak