Pan Asia updates Indonesian coal project
Friday, October 28 2011 - 02:23 AM WIB
Operations
Flagship Pre Development Project - TCM ? South Kalimantan, Indonesia (75% interest)
This project is located immediately adjacent to the east of Arutmin?s ATA open pit coal mine which comprises multiple coal seams of high calorific value and good infrastructure to the Batulicin barge loading port. In the prior quarter, the Company completed the phase 2 drilling and substantially increased the Project?s JORC Resource to 52.2Mt, comprising 22.04Mt of Indicated Coal resources and 30.16Mt of Inferred Coal Resources. The quality of the coal has an average calorific value of 6,534 kcal /kg (ADB), 5.65% total moisture, 14.24% ash and 1.16% sulphur.
TCM Phase 3 Drilling
During this quarter, the Company commissioned the phase 3 drilling programme to expand and upgrade the resource as well as assess the open pit potential on the TCM side of the boundary with Arutmin.
This programme of ~ 6,500+ metres will comprise:
? 13 holes for 4270 metres to:
- Progress the southern underground mining area through Final Feasibility
- Increase the level of confidence (resource estimates and mineralisation) in the proposed southern underground mining area.
- Conduct all necessary test work (geotechnical, hydrogeological, methane gas and spontaneous combustion tests) required to commence an underground coal mining operation.
- Expand resources to the east
? ~ 9 holes for 1342 metres to target a potential open pit area.
? 3 holes for 1050 metres to test the extension of the resource to the North and a possible further underground mine.
To date, 10 holes targeting the potential open pit area have been completed with 1,412 metres of drilling. At least 6 of these holes indicate strip ratios acceptable to open pit mining. Detailed open cut mine designs and mineralisation will be evaluated once a topographic survey has been completed. Surtech have been commissioned to fly LiDAR over the entire TCM concession area, with the final data expected in approximately 10 weeks. LiDAR is the quickest and most cost effective process of obtaining detailed topographic data over the project area given the ground conditions.
Drilling has now moved on to target the southern underground area.
No safety or environmental incidents were reported on the TCM project for the quarter.
TCM Project - Independent Study Completed
During the quarter, the Company completed the Independent Study undertaken by leading underground mining group KOPEX on the TCM project. The key conclusions and recommendations from the Independent Study indicated the following:
? Based on the outcomes from the Study, the indications are that the original target of at least 1.5 million saleable tonnes per annum over a 15 year period (following initial construction), is considered achievable (please refer to the announcement on 12 July 2011 for mine design parameters used by KOPEX in targeting its scale of operations).
? Based on the levels of detail in the Study, the target underground area at the TCM mine presents a viable and economic opportunity.
? Additional underground mineralisation may exist in the North area. Current resources for the TCM concession area are stated as 52.2Mt, comprising 22.04Mt of Indicated Coal Resources and 30.16Mt of Inferred Coal Resources.
? The quality of coal has an average calorific value (adb) of 6534 Kcal/kg, moisture 5.65%, ash 14.24% and TS 1.16. Retreat longwall mining methods are considered most appropriate providing the best option to attain the target mineralisation levels established for the project.
? Mine designs are expected to be conservative with respect to potential longwall extraction rates. Increased longwall dimensions would increase mineralisation, overall productivity, & project economics.
? The access to the seams has been assumed to be by inclined drifts from the surface. KOPEX recommends that the option of access from an opencut highwall should be pursued as part of the future studies.
? Initial indications from the geotechnical assessment are that the ground conditions will be better than those encountered at the Indominco underground mine in East Kalimantan. This is an important and positive factor to the project as there were no major geotechnical issues encountered at the Indominco mine. Based on the potential benefits as described, KOPEX recommends that the TCM project be advanced to full final feasibility stage.
The Company and KOPEX reiterate that there remains geological risk that applies to the whole mining activity and results from the limited information from the drilling carried out to date. Results from the additional drilling and geophysical investigation currently underway is required to increase the level of confidence of resources, improve the understanding of the magnitude and intensity of faults, frequency and location of possible seams & parting thickness variation and changes in seam gradients, which would impact on the mine design. Given the limited rock data, further test work to ascertain a full suite of rock characteristics for the coal and immediate roof strata at various locations is to be undertaken in the next phase of work as well as all gas testing.
TCM ? Appointment of Palaris as advisers to TCM project
During the quarter the Company appointed Palaris Mining Pty Ltd (?Palaris?) as its independent adviser to PZC?s flagship underground TCM Coal Project.
Palaris is an Australian company that has extensive experience in providing specialist longwall underground mining consultancy services on major capital procurement projects to the coal industry.
TCM ? Commissioning of Final Feasibility Study
During the quarter, the Company executed a formal agreement with leading underground mining group KOPEX to undertake a Final Feasibility Study on the TCM Coal Project.
This followed the recently completed Independent Study which indicated the project?s viability targeting 1.5 million saleable tonnes of high CV coal per annum over a 15 year period (following initial construction). Mine design parameters are outlined in the Final Feasibility Study announcement on 12 July 2011.
The Final Feasibility Study is scheduled for completion by the end of the first quarter 2012.
BCKP Flagship Exploration Project (50% interest)
Field work has commenced with an exploration team starting a reconnaissance programme over the entire concession. Once completed, this will be followed up by thorough mapping of areas of detailed interest (in addition to the current known outcrops) to identify all drill targets prior to undertaking a drill programme.
Ranrich Projects (cashflow from loan repayments, royalty & offtake)
Ranrich recommenced deliveries of coal in June delivering 50,000 tonnes in the month. Of this, 40,345 tonnes were delivered to Noble Resources.
Coal quality deteriorated with this delivery showing higher moisture and lower CV than prior deliveries. While this does not affect the Company?s return (as PZC receives a fixed amount per tonne) the buyer has requested that the supplier establish a dedicated stockpile as well as undertake additional pre sampling to enable better quality control and clarify current coal spec pre delivery. These steps are well underway but may result in the July delivery being deferred a month. However, as Ranrich?s commitment is to pay PZC a minimum delivery amount each month, the Company has invoiced Ranrich for an interim payment installment if a delivery is missed. (end of edited excerpt)