Orpheus Energy updates Indonesian coal project
Friday, January 31 2014 - 02:33 PM WIB
Coal Production/Sales
| Thousands of Tonnes | Quarter Ended | YTD | ||||
| ? | Dec-13 | Dec-12 | Change | Dec-13 | Dec-12 | Change |
| Coal Production | 29,767 | 44,025 | ? | 29,767 | 44,025 | ? |
| Coal Trading | 21,643 | 0 | ? | 21,643 | 0 | ? |
| Total Coal Sales | 51,410 | 44,025 | 16.77% | 51,410 | 44,025 | 16.77% |
As announced on 20 December 2013, Orpheus generated more sales income than outgoings for the month of December. The company mined ~30,000 tonnes from its Kintap ADK mine, following normal mining and trucking activities resuming normal operations on 21 November 2013, after heavy unseasonal rains earlier in the quarter. Additionally, the company?s trading division sold ~22,000 tonnes of coal from small local producers. As at 31 December, there was ~3,579 tonnes remaining at the SKJM Port stockpile, which has subsequently been sold.
An Indonesian trading group purchased all of the saleable coal in December, and under an agreement with Orpheus, has committed to ongoing purchases of all available Orpheus coal over the next 12 months. Superior net margins were achieved from Orpheus?s own coal mined at ADK and, as previously announced, the monthly rate of production is anticipated to increase to 50,000+ tonnes over the course of 2014. Trading coal volumes will also increase in 2014 with additional arrangements with other local producers already secured by Orpheus.
Orpheus achieved an average sale price in line with the benchmark Indonesian Coal Index (101) price for the sales of its 4200GAR thermal coal in the December quarter and the price for this coal is expected to be approximately the same for the March quarter.
During the December quarter, the ICI averaged US$39.25/t, which was a 5.7% decrease from the previous quarter. Despite the drop in coal price, Orpheus was able to offset this with a corresponding 1.34% increase in the value of the US dollar against the Australian dollar, and a ~10% reduction in contracting rates at its ADK mine over the same period.
Post reporting date, Orpheus?s ADK production has been reduced due to further poor weather in early January and a boundary clarification process with neighbouring large coal miner, PT Arutmin, over the precise boundary location, While that issue is being resolved, Orpheus has been finalising a new mine plan to commence mining activities in a new area of the ADK tenement imminently, to increase the monthly rate of production over the next few months, making up for the lost tonnage in January.
Infrastructure
On 10 October, Orpheus announced it had secured additional infrastructure capacity at Abidin 1 Port in South Kalimantan, of 40,000 tonnes per month (480,000 tpa), together with a five year offtake agreement. Located approximately 30km north-east of SKJM Port, Abidin 1 Port currently has loading capacity of over 120,000 tonnes per month, so there is potential for Orpheus to increase its monthly tonnage throughput.
Together with the previously announced exclusive 10 year agreement with SKJM Port in providing Orpheus with barge loading capacity in excess of 200,000 tonnes per month, the company has secured overall port loading capacity of up to 250,000 tonnes per month (3,000,000 tonnes per year) in South Kalimantan.
As part of the development plans for SKJM Port, there is the potential to increase the loading capacity up to a total of 500,000 tonnes per month (6 Mtpa) through the construction of two additional loading slots, and a road underpass to provide enhanced road hauling efficiency.
Exploration
As Orpheus has been focused on generating cash-flow from its mining, infrastructure and trading activities, as well as controlling costs, minimal exploration work at the company?s South and East Kalimantan and Papua projects was undertaken in the quarter. (end of excerpt)