Jatenergy granted production license for Jongkang project

ASX-listed Jatenergy Limited said today it had secured the Indonesian government?s production license for its Jongkang coal joint venture in East Kalimantan, just one week after it started mining its first coal from the neighboring Jongkang II mine.

The license allows Jatenergy to commence coal mining operations from the Jongkang project. An advanced drilling program is nearing completion to define a resource covering the first planned mining pit on the tenement. Additional pits are also being planned.

?The granting of the license for Jongkang is a major milestone that sets in motion a rapid path to production on a second coal mine for the company. Given the proximity to our current mining operation at Jongkang II, we expect Jongkang to come on stream during the first quarter of 2012, with our other east Kalimantan project ? Atan Bara ? to follow soon after,? said CEO Phil Hodgson in a media statement.

The company announced late in August that it had reached a preliminary agreement with Wijaya Mulia covering Jongkang, and then last week announced the execution of final agreements covering Jongkang as well as an operating mine ? Jongkang II ? with the common local partner to both projects.

Under the final agreements, Jatenergy will cover the working capital costs of the projects, expected to be a maximum of US$2 million, in return for 30% of the mining margin and the ability to market both projects? entire output. The projects are sited 5 km from a stockpile, crushing and conveyor loading facility on the Mahakam River, about 25 km from the coal shipping hub of Samarinda.

?We have reached the tipping point in our transition to becoming a meaningful energy player. While maintaining focus on our current projects, we are also working hard on new opportunities to exploit our enviable position as a cash-producing explorer, with plenty of upside potential, in a rapidly growing Asian energy market.? (romel)