Orpheus secures controlling interest on more E. Kalimantan coal mines

Australian listed miner Orpheus Energy announced on Thursday that it has secured a 51% equity ownership in two additional tenements (B34 or blocks B3 and B4) in East Kalimantan under its joint venture agreement with strategic alliance partner PT Mega Coal International (?Mega?). All legal and technical due diligence has been completed.

B3 covers an area of 4775 hectares, has had historical geological mapping, and reported a high quality coal sample in 2007 featuring low ash (1.5%), low total moisture (8.3% ar) and an energy content of 7123 Kcal/kg.

B4 covers an area of 3126 hectares, has also had historical geological mapping, and reported a high quality coal sample in 2007 featuring low ash (1.9%), low total moisture (6.5% ar) and an energy content of 7253 Kcal/kg. Samples taken in July 2011 returned calorific values at 7270, 8055, 8095 Kcal/kg (adb).

Orpheus currently has an exploration target of 5-10Mt for B34 and is planning a drilling program to delineate a JORC resource, expected to commence in Q1 2012. Orpheus?s initial geological review of B3 and B4 during an extensive site visit in July 2011 identified significant coal outcrops which are expected to have an extensive strike extent.

B34 is located approximately 60km west of Orpheus?s B26 projects and will ultimately be joined by a dedicated existing haul road. Coal mined out of B34 will also be transported by barge out of the same facilities near Tampang as B26 production.

Following conversion of the B34 Exploration KPs into Exploitation IUPs, expected to occur in Q2 2012, it is planned that mining from the B34 projects will eventually double Orpheus?s total production from this area.

The joint venture provides that Orpheus pay AUD$2.2m to Mega for a 51% equity in B34. (romel)