Kangaroo Resources clinches E. Kalimantan coal mine deal
Thursday, October 1 2009 - 03:49 AM WIB
The company said previously reported JORC resource at the GPK Project was of 248 million tonnes (MT) of thermal coal, including an indicated resource of 141 MT and an inferred resource of 107 MT
KRL is committing to spend up to $8 million on development costs to bring the project into production, it said
?The GPK Project is progressing toward an exploitation license, which permits works to be initiated immediately to facilitate the commencement of initial production by the planned start date of December 2009. GPK has the potential to be rapidly advanced to development for modest capital expenditure,? it added.
142 MT of the coal resource is at depths of less than 60 meters, thus a likely high resource to reserve conversion, with expected low strip ratio while coal quality indicates low sulphur and ash levels, with an average calorific value of approximately 5,245kcal/kg (adb).
The project is located l5kms from the Mahakam River, a large inland river in East Kalimantan that facilitates the development of infrastructure, including road and port facilities, for the transportation of coal.
GPK said it would complete site works, obtain equipment and confirm contractors for planned initial production of 25,000 tonnes per month by December 2009.
It would also start the infrastructure works process to allow production ramp-up to 1 MTPA by mid 2010, 2 MTPA in 2011, and ultimately ~4 MTPA in 2012.
The company said it Indonesian partner will finalize coal off-take agreements with PT Indonesia Power, a subsidiary of state electricity firm PLN.
The company said it will conduct a drilling campaign to increase the confidence in the JORC resource to a measured category to allow a mining plan to be generated for the planned production ramp up.
?KRL will be working closely with its Indonesian partners over the next three months to expedite initial production from GPK. The Company?s Indonesian partners have significant experience in start-up and managing coal operations in East Kalimantan and KRL will leverage this experience to move this project into production,? it said.
To adequately secure the rights to the GPK Project, KRL has entered into a separate Deed of Termination and Release with KAL Energy, Thatcher Mining Pte Ltd (a wholly owned subsidiary of Kal Energy) (Thatcher) and PT Graha Panca Karsa. Thatcher had entered into various historical agreements relating to the GPK Project and the Deed of Termination and Release will result in those agreements being released in full. The Deed of Termination and Release grants KRL a license to use the information in the historical JORC compliant resources reports prepared by Kal Energy. In addition, KRL will own all mining information relating to the GPK Project (including the JORC reports) once the proposed settlement payments have been made to Kal Energy.
KRL has agreed to pay Kal Energy a total of $5 million under the Deed of Termination and Release. Of this, $100,000 has already been paid, $2,400,000 is due in 30 days and a further $2,500,000 is due in 60 days. KRL has the election to extend each of these payment dates by a further 45 days by paying an extension fee of $50,000.(denny)
