Orpheus receives pit design for its East Kalimantan project

Australian listed miner Orpheus Energy (OEG) said it has received a preliminary pit design from Minarco MineConsult (Minarco) for its 51 percent interest in the B26 joint venture, consisting of Block 2 (B2) and Block 6 (B6) coking and thermal coal project, in East Kalimantan.

Orpheus has commissioned a survey of the project area B2 to identify coal face positions in order for Minarco to complete both the short term and life of mine production plans.

The key target features of the B2 short term mining production plan include initial in-situ coal quantity of around 750,000 tons. The company has secured port location, about 27 km away near Tampang village.

The project targets to produce of 40,000 tons per month or 500,000 tons per annum from November 2011. It targets semi-soft coking/thermal coal production split of 15:85 percent and operating costs of around A$ 45 per ton.

The sales offtake agreements are currently being negotiated with potential buyers to reflect current prices.

?The B2 project promises to be a highly profitable venture and it demonstrates the systematic approach that the company will use as it adds additional Indonesian projects into its strategic alliance with our partner Mega Coal International,? company Executive Chairman Wayne Mitchell said.

Concurrently, Orpheus?s 51 percent interest in neighboring B6 project Exploration KP will be converted to an Exploitation IUP in preparation for mining in due course, following completion of the B2 mine plan.

The B6 project currently has an exploration target of 1.5 to 2.5 million tons and has recently undergone a substantial drilling program of over 30 drill holes to establish a JORC resource. (romel/roffie)