KANGAROO Resources has entered agreements with its strategic alliance partner and majority shareholder PT Bayan Resources which allow for development of haul road and port infrastructure. This work will benefit the adjacent coal mining activities of the partners in East Kalimantan.

Kangaroo’s subsidiary PT Sumber Aset Utama (SAU) will sell certain unused infrastructure assets to Bayan for US$12 million. Bayan will then use the assets to help build and operate a new haul road and upgrade, expand and operate Senyiur Port.

Kangaroo’s subsidiaries will have access to the new haul road and newly upgraded port at 30% of their available capacity on a ‘take or pay’ basis, according to Kangaroo’s forecasted requirements.

The partners have also entered an agreement which provides a more formal framework of cooperation and support to enable the parties’ coal projects to be co-developed in order to maximise use of the infrastructure and allow Bayan and Kangaroo to optimise outputs and profitability.

Bayan’s Tabang project comprises two operational coal mines in Kutai Kartanegara Regency of East Kalimantan. Kangaroo’s Pakar project comprises nine concessions not yet in production and is immediately south of the Tabang project. The Tabang and Pakar deposits are contiguous and part of the same geological structure.

Bayan is increasing production at Tabang and as part of its expansion plans is upgrading and expanding Senyiur Port.

PT SAU owns a haul road between one of its Pakar concessions and Senyiur Port, as well as land, infrastructure, buildings and fixed equipment at Pakar, and the Senyiur Port. These assets are not otherwise being used while the Pakar concessions continue through the licensing and permitting process.

The agreements will entitle Kangaroo’s subsidiaries to 30% of the overall throughput capacity from the new haul road and expanded port infrastructure. This equates to approximately 5.4 million tonnes per annum following completion of Bayan’s current expansion phase and potentially 9 million tonnes if the next phase of the expansion proceeds and is completed. This allocation matches Kangaroo’s current long-term development plans for Pakar.

Meantime, Kangaroo advises that work continues on long-term mine planning and securing final mining and forestry permits for the Pakar North projects to enable it to commence production alongside Bayan’s existing Tabang mining concessions. Operations at the Mamahak project remain suspended and mining resumption remains dependent on coal markets improving, and establishing a more reliable logistics route.

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