Cokal Ltd has identified potential additional seams, the KLM seams, and confirmed that they contain high-quality premium coking coal at its Bumi Barito Mineral (BBM) project in Central Kalimantan. The new seams, which outcrop to the east of the high quality J seam, are the uppermost in the package of 13 seams mapped to date.

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The BBM production mining lease covers about 15,000 hectares, the maximum area allowable, adjacent to BHP Billiton’s Juloi tenement, straddling the Barito River.

The new seams form a significant portion of the JORC-compliant exploration target announced in June 2012. Eighteen bore holes have been completed in the KLM area and core samples for four of these bore holes have been analyzed.

“These results confirm the seams in the far eastern part of BBM continue to produce a premium coking coal, a welcome addition to the existing premium metallurgical coal at the project,” says Cokal executive director Pat Hanna. “All of the core samples which have intersected the seam have demonstrated excellent coking potential.

“Although the initial analytical results of the raw coal samples indicate an ash range between 12.6% and 16.5%, the washed coal results indicate high yields ranging from 80% to 90%, and ash results from 4% to 5%, achieved using a relatively high separation density of 1.6. The in-situ ash is generally related to the presence of thin stone bands. We are currently testing large diameter cores to determine the possibility of easily separating the stone bands from the coal using a simple in-pit screening process,” he says.

“We are progressing our definitive feasibility study which will allow BBM to be ‘bankable’ and then taken into production in the first half of 2014. The BBM project will be developed on the basis of a 2 million tonnes/annum direct ship operation. Plans are well progressed now that the EIS is approved and a mining IUP granted for a project up to 6 million tonnes/annum. These are critical elements which must be completed and approved in applying for the necessary mining approvals for the project,” Pat Hanna says.

BBM has a JORC-compliant resource of 77 million tonnes comprising 70 million inferred tonnes and 7 million indicated tonnes. Cokal has eight drill rigs active on BBM with seven focused on converting the 200-350 million tonne additional exploration target into JORC resources. Cokal is targeting an upgraded resource for release in the third quarter of 2013, which will include definition of measured and indicated resources which form the basis of the detailed mine plan on which the definitive feasibility will be based.

“We continue to receive strong interest from some of the world steel industry’s biggest participants. They are motivated to support the potential for a new metallurgical coal basin which allows them to diversify their current raw material supply away from the existing limited geographic locations which are dominated by the majors,” Pat Hanna says.

www.cokal.com.au

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