Strike Resources updates Berau coal project

The following is an excerpt issued by Australian firm Strike Resources Limited Quarterly Report ended 31 December 2010 released on Monday.(ed)

Berau Thermal Coal Project - E. Kalimantan (Strike 100%)

Joint Venture Negotiations
During the quarter Strike devoted considerable effort to negotiations to restructure the Berau Project co-operation agreement to address issues raised by Indonesia?s 2009 Mining Law. Strike announced on 19 November 2010 that the position adopted by its partner raised uncertainty about whether negotiations would succeed, and that it was considering all options to secure its rights.

The parties have held two rounds of talks since that date, with the second round still underway as at the date of this report. While discussions have been open and constructive no settlement has been achieved as yet. Given the current strength of the thermal coal market and the advanced stage of the project the company is hopeful of a timely resolution to this matter and will keep shareholders informed of progress.

Strike remains committed to pursuing options for the joint development of this project or alternatives which would deliver value for its shareholders.

Project Development
During the quarter project development continued In preparation for any successful conclusion to joint venture discussions. It is a condition of the coal concession that project development work must proceed. Strike and their partner PTKJB continue to progress the project approvals and key technical and commercial areas until agreement is reached on the joint venture.

Review and analysis of tenders for the key capital and operating contracts were completed during the quarter. From this analysis preferred contractors have been identified for the mining and haul road construction contracts. The next step in this process is to commence detailed negotiations with the identified preferred suppliers. This will commence following resolution of the joint venture agreement.

Strike?s partner, PTKJB, is responsible for all project approvals. Some progress was made on approval for the proposed alignment of the coal haul road from the mine site to the barge port on the Segah River, however the timing of formal approval remains uncertain at this time.

Formal acceptance of the tree species and quantities survey report by the Forestry Department remains pending but is expected to be received in line with the project development requirements. (end of excerpt)