Strike Resources needs more time to complete coal prospect due diligence

Australian company Strike Resources Limited (formerly Fast Scout Limited) said Monday it had secured an extension date for the completion of due diligence on a thermal coal concession in East Kalimantan from the original schedule of Mar. 15 to Jul. 17.

Strike said it had conducted a 1,676-meter preliminary core and open-hole drilling on a prospect of the concession, which indicated the presence of six coal seams of between one and five meters thickness at the Balikpapan Formation.

It was emboldened by the preliminary results. However, a further due diligence drilling is required to confirm the strike extension of the seams along the 10 kilometer coal bearing formation within the concession, Strike said.

Strike also said it had not yet drilled another prospect of higher quality thermal coal located in the Pulau Balang Formation within the concession due to a delay in obtaining consent for access from land owners.

Strike added that aside from the further drilling both formations, it would also carry out engineering and marketing studies.

Strike earlier signed an agreement with PT Kaltim Jaya Coal and PT Kaltim Jaya Mineral (KJM) for the legal right to exclusively conduct general survey activities, explore for, exploit, mine and sell all coal in three concessions in East Kalimantan.

Strike said Monday that it will not proceed with the second concession based upon preliminary drilling and other due diligence. Dateline for due diligence on this concession expires on Mar. 31. The second concession is located approximately 150km north of Balikpapan.

Strike also said that the third concession has not yet been granted and accordingly no due diligence work has been conducted. (Robert)