Studies show more than 500Mt of low strip ratio coal at EKCP: Churchill

UK coal explorer Churchill Mining Plc said on Monday that studies it has undertaken as part of its fast-track to production, show that more than 500 million tonnes of the in-situ JORC-compliant resource of 1.4 billion tonnes at its East Kutai Coal Project (EKCP), East Kalimantan, falls within a preliminary pit design at a stripping ratio of just 2.23:1.

According to the company, this calculation does not constitute a JORC mineable reserve. However, the results indicate the planned future operations will allow significant tonnages of the coal resource to fall within design pit shells with a low stripping ratio, it said.

?At this stage the pit design studies concentrate only on the northern half of the current target drilling area of the RTM block, with the southern section still being evaluated,? it added

Churchill's Managing Director, Paul Mazak, commented; "We are now approximately 12 months off our first phase of production at the EKCP. With the current international coal price having come off, these low stripping ratios are of great positive significance to the economics of the project. By focusing initially on the coal available at low stripping ratios, we are expecting to significantly reduce our operating costs during the initial period of mining, which is especially important on large projects such as this one."

Churchill said it was currently in talks with a number of Indian companies about off-take agreements.

In May 2007 Churchill announced a sales agreement had been entered into to purchase a 75% interest in the East Kutai Coal Project from PT Techno Coal Utama. Churchill has now extended the size of the project by 200 square kilometres by acquiring a 75% interest in the abutting tenements to the west of EKCP from the Investmine Group of Indonesia. Exploration and resource drilling continue along with scoping and pre-feasibility work. (alex)