Palace Resources to form JV in W. Sumatra coal project

Perth-based firm Palace Resources Ltd announced Tuesday that it has been approached and is in discussions with the owner of the IUP immediately to the south of the Lumpo Project in West Sumatra regarding the establishment of a Joint Venture.

The permit comprises a coal production permit (IUP operasi/ produksi) over 192 Ha and an exploration permit (IUP explorasi) of 1,686 Ha. Palace Resources has carried out an initial investigation to confirm mine ownership to ensure that Palace is dealing with the mine owner which has come back positive, the company said.

It is understood that the coal is of a similar calorific value as the Lumpo coal, ie greater than 6,500 kcal/kg.

In the event that Palace concludes an agreement with the owner, Palace would aim to extend its technical due diligence drilling to the neighbouring lease with a view to commencing a small production off take in early 2012.

This recent approach gives Palace Resources a further prospect to bolster the current exploration program being undertaken on Lumpo as well as increasing its commitment in the area. (romel)