An exploratory drill program at Pan Asia’s flagship Transcoal Minergy Coal (TCM) concession in South Kalimantan has confirmed a potential second underground deposit in the northern section of the project.
Four holes were completed 1.5km north of the previously drilled limit with drill core and geophysical logging confirming the continuity of the same coal seams from the TCM South deposit which has a JORC compliant resource of 114 million tonnes. The deposit is undergoing a feasibility study for an underground longwall mining operation.
Pan Asia’s chief executive officer Alan Hopkins says, “This is an excellent result confirming the probability of as similar deposit in the northern half of the concession.”
The confirmation comes as Pan Asia boosts its cash reserves with a US$4.5 million loan repayment from Ranrich Investments as a result of a restructured agreement.
The company’s subsidiary entered into an agreement with Ranrich in 2010 for the financing of and investment in various coal projects. A condition of the deal included Ranrich making contracted coal shipments to a designated buyer arranged by the subsidiary, however it has struggled to make the deliveries and was required to pay the outstanding monies to Pan Asia.
Pan Asia has also agreed to exchange its right to earn a 50% interest in the BCKP project for a royalty of US$1/tonne on all coal sold from the project, up to US$15 million.
Alan Hopkins says, “This settlement is very timely as it strengthens our near term cash position and we can now focus on choosing the best development arrangements for our flagship TCM project.”
The company is expecting its feasibility study on the TCM project to be completed in the next few weeks.