Orpheus Energy has re-commenced mining at its B2 coal project in East Kalimantan after the completion of an overburden removal program. The company’s Indonesian mining contractor PT Debbia Mining successfully removed the overburden and exposed coal at the 51%-owned project last month.  1

The project’s new open pit is located centrally in the tenement area with production expected to ramp up to 30,000 tonnes per month, earning Orpheus up to $240,000. The coal will be transported to the nearby barge loading facility at Tampang village by truck.

Orpheus executive director Wayne Mitchell says, “We are very happy with our mining contractor’s positive progress at B2. Once we reach our monthly target production rate, the company will be in a cashflow positive situation, which gives us the flexibility to focus on rapidly developing our other near-term production projects.”

B2 has a current JORC compliant resource of 0.95 million tonnes indicated and 0.18 million tonnes inferred coal, which will provide a mine life of about three years. The company’s mine plan indicates PT Debbia Mining will move to the adjacent 2.5 million tonne B6 project once B2 reserves are depleted.

In other news, Orpheus has started a 12-hole deep drill program at its recently 50%-acquired Citra Bara Prima (CBP) coal project in South Kalimantan, to delineate a JORC resource. The 195 hectare CBP project is about 6km from the company’s Kintap ADK site, and less than 2km from a river barge loading facility. Orpheus’ technical team has used previous drill results to identify two main coal seams close to the surface at the project.

A preliminary mine plan for a 50,000 tonne per month operation is being prepared to enable the project to move rapidly into production during this final quarter of 2012.

“CBP is very important for Orpheus as it is the next step in our strategy of bringing additional Kintap area satellite mines into production. It already has a production licence, which means we can quickly start mining and exporting coal. In addition to our coal already coming out of ADK, Orpheus will soon be mining 100,000 tonnes per month from the South Kalimantan area,” said Wayne Mitchell. A joint venture agreement with Mega Coal is being finalized for CBP.

www.orpheusenergy.com.au

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