Orpheus signs HOA with Citra Bara Prima
Tuesday, September 4 2012 - 03:58 AM WIB
Australia-listed Orpheus Energy announced Tuesday that it has signed a heads of agreement (HoA) with PT Citra Bara Prima (CBP) over a 195 hectare coal production project in South Kalimantan.
The CBP tenement has been previously mined and drilled. Orpheus? technical team has conducted desktop analysis on earlier exploration results, identifying a minimum of two coal seams varying in thickness from 4 to 12 meters, near surface, Orpheus said in a statement Tuesday.
Orpheus currently has an exploration target of 2.0Mt to 4.5Mt and has planned a 12 hole drilling program, each to a total depth of 100m, to delineate a JORC resource, expected to commence by end September 2012.
The CBP project is located approximately 10km south-west of Orpheus? ADK project and is close to the river side barge loading facility at SKJM, located less than 5km away.
During the upcoming CBP drilling program, Orpheus will be developing its preliminary mine plan so that the project can rapidly move into production, planned to be by end October 2012. At this stage, it is anticipated that the CBP project will be mined at a rate of 50,000tpm, when in steady-state production.
The HOA provides that Orpheus pays a purchase price of US$0.50 per ton of JORC black coal resource. This is payable to PT Mega Coal International, its joint venture partner which owns CBP, in the following structure:
1. Stage 1: US$200,000 as a deposit prior to the establishment of a JORC
2. Stage 2: On completion of Orpheus? successful drilling program generating a JORC resource, Orpheus will pay Mega US$0.50 per ton in cash, scrip or combination of both, at Orpheus? election.
?The CBP transaction is very important for Orpheus as it is the next step in our strategy of bringing additional Kintap area satellite mines into production. CBP already has a production license, which means we can quickly start mining and exporting coal. In addition to our coal already coming out of ADK, Orpheus will soon be mining 100,000tpm from the South Kalimantan area,? said Executive Chairman of Orpheus, Wayne Mitchell.
Orpheus and Mega Coal will now move to execute a joint venture agreement over the CBP project.
Editing by Reiner Simanjuntak