The Jakarta High Court in Indonesia has confirmed the rights of Kangaroo Resources to the overlapped portions of five concessions at the Pakar Coal Project in East Kalimantan. The overlap of the DE, OM, SA, CA and BS concessions has been subject to legal action with a third party coal company, PT Senyiur Sukses Pratama (SSP).

On August 18, 2017, the High Court held on appeal that SSP had committed a fatal procedural flaw by filing its legal suit against the provincial government of East Kalimantan beyond the 90 days from cause of action allowed under Indonesian law.

A statement issued by Kangaroo said, “That procedural flaw cannot be cured and as such the April 2017 decision of the District Administrative Court in Samarinda in favour of SSP finding the instruction by the East Kalimantan government requiring SSP to relinquish certain overlapping areas as invalid was set aside and costs awarded against SSP.

“In this regard, the net result of the Jakarta High Court’s decision is that the company’s rights to the overlapped portions of our concessions have been confirmed. SSP has 14 days to appeal against the decision of the Jakarta High Court to the Supreme Court of Indonesia.”

In its June quarter report, Kangaroo said that it had designed a new drilling program for part of the TA concession at Pakar with the plan to go to tender in the early part of the current quarter. TA is 34.2% covered by palm oil plantations and 30.3% by forestry concessions with the latter requiring borrow-use (pinjam pakai) permits for any exploration and production activities.

The remaining 35.5% is not restricted but is subject to land compensation. The initial drilling program will focus on this area and has been divided into two stages totalling 73 drill holes and 12,090 metres.

Kangaroo had previously applied to the regional government for exploration borrow-use permits for the 1517 hectares in TA and the 5000 hectares in TJ, however this was delayed due to the regional government issuing a moratorium on new permits which ended on April 30, 2017. The company has reactivated its efforts to obtain these permits and expects the drilling program in the non-restricted area can then follow on into the forestry areas covering both TA and TJ once permits have been obtained.

Meantime, at the Graha Panca Karsa (GPK) project a topographic survey has been completed and drilling is continuing. The purpose of this survey was to improve the accuracy of the topographic information in the area and to align this with the drilling program.

During the June quarter, there were 23 holes drilled totalling 1066.9 metres of the total revised program of 41 holes for 1755 metres). It took the total holes drilled to date to 35 and 1493.9 metres, or approximately 85%. The original drilling program of 48 holes was reduced to 41 holes after taking into account the new topography information and site conditions.

Following completion of this drilling program the company plans to commission an independent estimate of mineral resources. Drill results are expected to be released during the current quarter.

Kangaroo has also appointed a contractor to perform a bathymetric survey of the Mahakam River from a location near the town of Melak, East Kalimantan, to the intended location of GPK’s barge loading facilities, a distance of approximately 78km. The survey will allow the company to make an assessment of the draft limitations of the river and select optimal barge sizes for transportation of coal.

www.kangarooresources.com

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