- Imminent production of high-quality coal from BBM Anak, a newly targeted mining area within BBM.
- BBM Anak is a separate and additional project to the BBM PCI Project (announced to the ASX on 24 May 2017).
- Cokal able to generate attractive cashflows from low-risk production.
- Production of a high calorific-value, high-volatility PCI coal, suitable for blending with lower quality coals, will be sold to local coal companies
For further details on the BBM PCI Project, please refer to Cokal’s announcement to the ASX on 24 May 2017 Cokal Limited (Cokal ASX:CKA, “Cokal” or “the Company”) is pleased to announce that preparations are advanced, with coal production imminent from at BBM Anak: a newly targeted mining area within the Bumi Barito Mineral Coal Project (“BBM”). BBM Anak is a separate and additional project to the BBM PCI Project as BBM Anak product coal has volatile matter greater than 12%. BBM PCI Project participants previously agreed to limit the BBM PCI Project to coal products with less than 12% volatile matter. BBM (Cokal 60%) is Cokal’s flagship asset, located in Central Kalimantan, Indonesia.
Cokal is establishing a small scale coal mining operation, which will produce a high calorific-value, high-volatility PCI coal. Product coal will be sold to local coal companies for blending with their lower quality coals. The location of the mine is in close proximity to the Barito River requiring a very short haul (around one kilometer) to the stockpile area.
Cokal has acquired the relevant regulatory approvals including the mining, environmental and forestry approvals from the various Indonesian Government Departments.
Cokal has successfully completed negotiations with the landowners and both parties are pleased with the outcome. As well, Cokal has negotiated terms for the supply of fuel, for land-clearing contractors and for a small fleet of mining and barging equipment.
Cokal expects to build a stockpile of coal beside the Barito River in July/August and commence barging to local coal producers downstream on the river.
Cokal’s on-site technical team has prepared comprehensive mine-plans, mining schedules and financial budgets, in accordance with internationally accepted mining standards. Cokal’s technical team has extensive experience in coal exploration and mining in Indonesia and throughout the world and is highly confident in the technical and financial merits of BBM Anak. However, under current disclosure rules, there is not yet the level of assurance required to disclose the anticipated operational metrics or financial performance of BBM Anak. Cokal looks forward to providing further details as and when we are able.
Development of the BBM PCI Project remains a focus, with site activities at BBM Anak contributing to the early development works at BBM PCI. The expected cash flow from BBM Anak will assist Cokal to continue to fund development of the BBM PCI Project, with production of an export quality Premium PCI coal forecast for December/January in accordance with Cokal’s announcement on 24 May 2017.
Cokal’s Director, Patrick Hanna, said “This is great news for Cokal’s shareholders. We thank them for their patience and now look to reward them by building up a strong export metallurgical coal business over the coming year. And the best part is that we are able to do this with minimal capital to kick start the business at a time when the global outlook for coal is indicating strong demand in the very near future, particularly in the Asian region.
Meanwhile, Cokal’s independent consultants continue to work on producing a Reserves Statement in accordance with the JORC Code and a Valmin evaluation report on Cokal’s assets. These reports have been delayed by a few weeks due to national holidays in Indonesia in the past month.
About Cokal Limited
Cokal Limited (ASX:CKA) is an Australian listed company with the objective of becoming a metallurgical coal producer with a global presence. Cokal has interests in four projects in Central Kalimantan and one project (which holds three exploration licences) in West Kalimantan, Indonesia considered prospective for metallurgical coal.
Source : ASX Announcement
30 June 2017