Orion announces E. Kalimantan JORC-compliant coal resources

Australian firm Orion Equities Limited announced on Friday that recent drilling had confirmed JORC-compliant inferred resources of 4.6 million tonnes of CV 5,800Kcal/kg at its Berau coal project in East Kalimantan.

According to the company, the coal has low ash (5-6%), low sulphur (0.55-0.70%) and inherent moisture of 13-15%.

An environmental impact study has been commissioned as a precursor to applying for a mining licence to commence operations in the second half of 2009. Various other studies are also in progress or being commissioned, including mine planning, transportation, port infrastructure and sales and marketing, the company said.

The project is located approximately 40 kilometres south-west of Tanjungredeb (Berau) and approximately 350 kilometres north of Balikpapan.

Orion acquired its 70% interest in the project in June 2007 from Strike Resources Limited (Strike). Strike retains a 30% interest in the concession (free carried until a decision to mine is made by Orion).

According to the company, the JV plans to commence a low cost strip mining operation of initially 500,000 tonnes of thermal coal per annum, increasing to 1 million tonnes per annum. Local topography together with the shallow nature of the deposits indicates that a low stripping ratio will be achieved, it said. Strike said on Friday that it was considering option to acquire the 70 percent stake Orion has in the project.

Additional exploration is currently being planned to test coal seam extensions to the south-east, to the north-east and to the south-west of the current work area where the Inferred Resource has been defined. This will comprise initial geological outcrop mapping to delineate drill targets.(denny)