Strike Resources acquires Berau coal project

Australian mining firm Strike Resources said on Monday that it has acquired 70 percent outstanding interests from its partner Orion Equities Limited in Berau coal project, East Kalimantan.

Upon completion of the acquisition, the company will hold a 100% interest in the project, it said, adding that the development of the project is being accelerated to take advantage of current high coal price

The company said that the low-cost strip mine was expected to produce 1.5 million tons per annum when it starts operation in 2009, and the output was expected to increase to 2 million tons per annum. The coal will be trucked and barged to ships for transport to markets in Asia.

An environmental impact study has been commissioned as a precursor to applying for a mining licence to commence operations in the middle of 2009. Various other studies are also in progress or being commissioned, including mine planning, transportation, port infrastructure and sales and marketing.

Additional exploration is currently being planned to test coal seam extensions to the southeast, northeast and southwest of the current work area where inferred resource has been defined. This will comprise initial geological outcrop mapping to delineate drill targets.

Earlier, Orion Equities announced that JORC-compliant inferred resources of 4.6 million tons of CV 5,800Kcal/kg, with low ash (5-6%), low sulphur (0.55-0.70%) and inherent moisture of 13-15%.

The project is located approximately 40 kilometres southwest of Tanjungredeb (Berau) and approximately 350 kilometres north of Balikpapan. (denny)