Kalimantan Gold signs Option Agreement on Kalimantan coal concessions
Tuesday, April 22 2008 - 01:59 AM WIB
Under the Option Agreement, KGC will have six-month exclusivity right to conduct due diligence on the companies that hold the KP's and carry out a minimum of 3,000 metres of drilling on the KP areas to assess the potential for coal reserves.
KGC said it would work with PT GMT Indonesia, an Indonesian-based consulting group which manages a number of coal exploration projects in East Kalimantan.
The Option Agreement, which covers a total of 25,2000 ha, is with the Indonesian Mesra Group which has a track record of securing good coal areas, having completed deals with Korean, Indian and Middle East companies.
One KP is located in Mandul Island, in northeast Kalimantan, where drilling is already underway to define the extent of the coal deposits. The coal occurs in six seams of up to four metres in thickness and has an initial indicated thermal value of 5300 to 5800 kcal/kg with accompanying low sulphur.
The CSU KP, located in East Kutai, is a prospective area of 2000 hectares containing seams up to five metres in thickness that has been identified by recent mapping. Follow up drilling is planned for this area, where the thermal value of the coal ranges between 5500-5900 kcal/kg and the distance to the coast is less than 40 kilometres.
Two other KPs are located close to Balikpapan and Samarinda in East Kalimantan and have easy access for exploration. One of these, the CIC KP, adjoins the Multi Harapan Utama contract of work that is reported to produce around 3Mt per annum from a reported resource of 120Mt. The host formation is the Pulaubalang and Balikpapan Formations which are both well known for their coal production in East Kalimantan. itself now recognized as a world hot spot for coal.
The final KP covers an area of 6066 hectares and is located within Warukin Formation sediments in West Kutai. The target in this area is higher calorific value coals, which can be transported by barge along the major coal-trading route of the Mahakam River.
During the coming months a further four Mesra KP areas are expected to be included under the Option Agreement.(denny)