Pan Asia completes feasibility study, expects 1.5m tpa from TCM
Wednesday, May 23 2012 - 02:43 AM WIB
Australia-listed firm Pan Asia Corporation has confirmed the technical and financial viability of its Transcoal Minergy (TCM) Coal Project in Indonesia in a recently released Feasibility Study, revealing that the project can deliver saleable coal of around 1.5 million tonnes per annum over a 15 year mine life.
Average operating costs have been estimated at US$52 per tonne compared to the average sales price of around $111.46 per tonne.
The study has also delivered a base case net present value of between $124 million and $136 million and an internal rate of return of around 20.85%.
While the original targeted saleable coal of 22.5 million tonnes is considered achievable, the base case mine plan and net present value is currently based on 18 million tonnes of saleable coal.
However, further exploration at TCM is underway with current infill drilling on the northern area is expected to help refine the mine plan and increase saleable tonnages.
?This is a major milestone for the company with our flagship project receiving such a positive independent review,? said CEO Alan Hopkins.
Highlighting the exploration potential at TCM, Pan Asia has revised its exploration target to between 200 and 220 million tonnes of 6,500 to 6,800 kilocalorie coal from the results of the drilled only parts of the concessions.
The company committed to the higher exploration target following an upgrade in the JORC Resource to 128.8 million tonnes earlier this month.
This was accompanied by an increase in the higher confidence Measured Resources to 50.2 million tonnes, compared to the October Resource of 35.6 million tonnes.
As previous drilling has confirmed the continuity of the same coal seams from the TCM South Deposit into the north of the concession, the company believes that this could effectively double the existing Resource, as well as the mine life, which would improve the project?s net present value substantially.
Pan Asia stated to continue adding to the already detailed Feasibility Study and will now have it independently reviewed by a third party, which will take some weeks.
Kopex Group, appointed as a partner on the TCM Project, has agreed as of late last year to step up its commitment to the project with an additional US$1 million in funding to cover the costs of an expanded drilling program.
"The importance of this is that the TCM Project is fully funded through to the completion of the final Feasibility Study," the company said in a statement.
Kopex?s total commitment towards the drilling program now stands at around US$1.6 million.
Australia based Pan Asia currently has an enterprise value of A$14 million and an EV/Resource valuation of A$0.11 per tonne, which is light compared to the average EV/Resource of $0.46 for peer explorers.
"There are a number of factors which should improve the value of the TCM Project including the extensional potential as well as its location next to infrastructure and an already operational mine. The TCM Project hosts high quality coal, which offers high revenue per tonne, and its location and proximity to infrastructure offsets higher mining costs," the company stated.
Editing by Er Audy Zandri