METALLURGICAL coal group Cokal Limited has received a conditional proposal for a debt financing facility of US$150 million from an international consortium including Platinum Partners. The company says the facility will initially be used to fund development of the 2 million tonne/annum Bumi Barito Mineral (BBM) Project.
Cokal has entered into detailed negotiations on the proposal which is in the form of a non-binding Memorandum of Understanding and is subject to various terms and conditions including the completion of technical and legal due diligence and obtaining the necessary regulatory approvals for the project to proceed.
Cokal is still in discussions with a number of parties, including this consortium, and is focused on finalizing the necessary funding to start construction on the project. The outcome of all its financing discussions, whether with the Platinum Partners consortium or others, is speculative.
BBM is in Central Kalimantan, in the prospective metallurgical Upper Barito Coal Basin, Regency of Murung Raya. It covers 15,000 hectares and is adjacent to BHP Billiton’s, Indomet Coal, Joloi Project.
Cokal recently announced an upgrade of the resources for the Eastern portion of the BBM coal project, comprising 10.5 million measured tonnes, 13.5 million indicated and 240 million inferred resources in accordance with the JORC Code (2012).
All of the additional coal resources have been determined as coking coal from analytical results. Deep stratigraphic boreholes (up to 400 metres deep) have confirmed the KLM area to consist of the continuation of the ‘J’ Seam to the east of the ‘J’ Seam outcrop area. This is due to a synclinal/anticlinal structural feature whereby the ‘J’ Seam extends from the outcrops down to depths of around 300 metres and then comes back up to the surface in the KLM area in the east.
Chairman and CEO Peter Lynch says, “Cokal is close to completing a definitive feasibility study using the latest coal resources. The economic modelling of the DFS results is expected to demonstrate that a good cash flow can be generated in early stages of production. I am particularly excited of the long-term potential of BBM which will include extraction of a large portion of the resources using efficient underground mining methods.”
The application for the final outstanding major approval hurdle, the Production Forestry Permit, was commenced in January 2013 and based on successful completion of significant interim steps, the company believes it is close to obtaining the Izin Princip Ijin Pinjam Pakai Kawasan Hutan Exploitasi (In Principal Forest Rent Use Permit - Exploitation Stage) from the Indonesian Forestry Ministry.