Pan Asia signs deal to mine S. Kalimantan concession

ASX-listed coal mining firm Pan Asia Corporation Ltd reported on Wednesday that it has signed an MoU with a contractor which is currently working in an adjacent mine to carry out coal mining operations at the Company?s TCM concession in South Kalimantan.

The Company said that under the deal with the contracting company currently responsible for mining at a second open pit in the PT Arutmin Indonesia ATA concession will expand ATA pit to TCM concession.

Upon further technical investigation, both parties will sign an Agreement of Cooperation in the Mining and Trading of Coal, which will detail the key commercial terms, including the tonnage to be extracted, the mining rate, the timeline and the profit sharing arrangements.

?Importantly, the Company will not bear any capital cost associated with the development of these open pit mining operations. Further, the Company stands to significantly benefit upon the completion of open pit mining, with the finished open pit available to provide access to possible underground coal mining operations at TCM. This is likely to save significant capital expenses typically associated with developing access to these future underground operations,? the Company said.

In order to fully evaluate the area being targeted by the potential expansion of the neighbouring open pit mine, the Company?s drilling activities are now focussing on an area approximately 1.6km x 1km located adjacent to the ATA pit.(denny)