BBM Anak coal production imminent

With preparations well advanced, production of high-quality coal is imminent from BBM Anak, a newly targeted mining area within Cokal Limiteds Bumi Barito Mineral (BBM) Coal Project in Indonesia. BBM is Cokals flagship asset and is in Central Kalimantan.

BBM Anak is a separate and additional project to the BBM PCI project as Anak product coal has volatile matter greater than 12%. PCI project participants have agreed to limit the BBM PCI Project to coal products with less than 12% volatile matter.

Cokal is establishing a small-scale mining operation, which will produce a high calorific value, high-volatility PCI coal. Product coal will be sold to local companies for blending with their lower quality coals.

Cokal says it will be able to generate attractive cashflows from the low-risk production. A contract miner will undertake mining with minimal upfront capital costs or working capital for Cokal.

The ASX-listed company has 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.

The location of the mine is in close proximity to the Barito River, requiring a haul of around 1km to the stockpile area. 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.

Cokals on-site technical team has prepared comprehensive mine-plans, mining schedules and financial budgets, in accordance with internationally accepted mining standards.

The 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.

Development of the BBM PCI Project remains a focus, with site activities at BBM Anak contributing to 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.

Meanwhile, Cokals independent consultants continue to work on producing a Reserves Statement in accordance with the JORC Code and a Valmin evaluation report on Cokals assets. These reports have been delayed by a few weeks due to national holidays in Indonesia in the past month.