Challenger Deep Resources has exercised an option through its wholly -owned subsidiary to purchase another coal project in Indonesia’s East Kalimantan.
The company has entered into an agreement to buy 100% of the issued and outstanding securities of PT Dua Putri Kutor (PT DPK), which holds the coal exploration rights to the DPK project in the Sangatta area of East Kalimantan. Challenger will pay almost Can$2 million in scheduled payments during the next two years for the project.
The company’s decision to purchase the property follows a successful program of due diligence involving field mapping, surveying and outcrop sampling.
The DPK project covers 12,830 hectares about 200km north of Samarinda which already hosts two large active coal mining operations PT Kaltima Prima coal and PT Perkasa Inaka Kersa. The project is at the IUP exploration stage.
Geological mapping indicates that it covers the Mangkupa, Kedango, Lembak, Balikpapan and Pulau Balang formations, which are known to contain coal mineralizations of economic significance. These formations typically host coal ranges of between 5000 to 8000 Kcal/kilogram.
“The potential for very high quality coal on this property, based on our limited sampling to date, combined with the property's close proximity to the coast makes for an exciting acquisition,” says Challenger’s president Ranjeet Sundher.
“The coking coal potential is particularly exciting and will be the focus of our initial exploration of the property. We view this as an important step in diversifying our portfolio of properties both geographically and by coal quality.”
In other news, Challenger has initiated the process to secure an IUP mining permit for its Tabang property, which is also in East Kalimantan. It has commenced preparation of the feasibility and environmental impact studies for the permit application.