Jatoil completes due diligence on major Kalimantan coal project

Energy company Jatoil Limited has completed due diligence on Blackrock Resource Pty Ltd?s major Indonesian project, Katingan, on the island of Kalimantan. Due diligence assessments are continuing on several other projects in Blackrock?s portfolio.

Katingan has a resource that is estimated to be between 36.4 million and 43.1 million tons, with more than 30 coal outcrops in the exploration permit and several measuring greater than 6m thickness.

CEO Phil Hodgson said ?Jatoil originally announced its strategic coal diversification plan on 6 September, 2010. While due diligence has taken longer than originally planned, we make no apologies in being thorough in our assessment of this important opportunity. An indicative date of 10 February 2011 is now targeted for a shareholder?s meeting to be held to approve the transaction.?

The Blackrock purchase will occur after a 1-for-4 consolidation of Jatoil?s issued capital. It will involve the issue of an initial 25 million Jatoil shares to Blackrock?s shareholders, to be followed by up to a further 37.5 million Jatoil shares if certain agreed production and resource targets are achieved.

Jatoil has also subscribed to the second tranche of a convertible note in Blackrock, with the total subscription now being $750,000. (kanti/romel)