Orpheus secures 50% interest of South Kalimantan miner

By Romel S. Gurky

Australia listed Orpheus Energy Limited has on March 8 announced the obtaining of 50 percent interest in its joint venture partner PT Mega Coal?s ADK operating coal mine in South Kalimantan.

?This mine, located in Tanah Laut regency, has been in production since April 2011, shipping 95,000 tons of coal between December 2011 and February 2012. It is a conventional truck and shovel operation mine with two open pits with transport and loading infrastructure in place,? the company stated on its quarterly report ended March 31, 2012.

The company announced on March 20 that it plans to produce up to 50,000 tons of coal per month, in which Orpheus is entitled for 50 percent of ADK coal mine operation with first cash expected to flow at the end of April.

A resource drilling program is underway to delineate JORC compliant resources at ADK, comprises of seven holes that cover the northern part of the concession where the main stockpiles are located and in the south west area where strike extensions of existing mined coal seams are projected to be.

Orpheus is known to control 51 percent interests in two other projects in East Kalimantan, namely in the B26 coking and thermal coal project as well as the B34 project.

The B26 is located about 100km from the regional center of Balikpapan and some 26km from a barge loading facility, targeting a semi-soft coking and thermal coal production split of 15 percent and 85 percent respectively.

?Orpheus will soon appoint a new mining contractor, with a coal sales offtake agreement, which will allow the company to re-commence B2 production, targeting a rate of 30,000 tons per month,? said the company in a statement.

Orpheus has progressed further exploration plans for the adjacent B6 tenement to delineate additional coal resources. The drilling program is expected to commence later in the year, with the intention of moving the B6 tenement into production thereafter.

Editing by Audy Zandri