KANGAROO Resources, which is 56%- owned by Bayan Resources, is drilling at Graha Panca Karsa (GPK) Coal Project in East Kalimantan with the aim of confirming previous drilling and gain a better understanding of coal seam geology. The company has signed the drilling contracts and socialised the program to surrounding communities.

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Coal stockpiled at a Kangaroo Resources’ project in Kalimantan.

During the December quarter the company finalised its detailed exploration program for GPK and finalised its tender for drilling and geophysical logging services.

The program comprises two stages with approximately 1200 metres of drilling, including 250 metres of coring, in the first stage followed by 1000 metres, including 340 metres of coring, in the second stage. All holes will be geophysically logged. Concurrently, Kangaroo will undertake survey work to consolidate topographical information.

Bayan has completed the ownership transfer to Kangaroo of nine coal concessions in the Pakar project which were the subject of the December 2010 Sale and Purchase Agreement, however four concessions, TA, AU, BS and CA, could not be transferred due to complications surrounding foreign ownership and divestment regulations. The company has obtained initial legal advice from an Indonesian law firm on a structure that may enable it to complete the transaction.

Kangaroo has relinquished certain areas on three of the concessions that overlapped with a third-party coal concession of PT Aditya Kirana Mandiri, which paves the way for the government to issue Clear and Clean status for two of these concessions.

Another concession, along with four others in this area, also has an overlap with another company, PT Senyiur Sukses Pratama (SSP). Uncertainty surrounding the boundary between the Kutai Kartanegara and Kutai Timur regencies gave rise to the overlap.

In 2012, the East Kalimantan government together with the heads of the respective regencies agreed on a final boundary which was in Kangaroo’s favour and the East Kalimantan government instructed SSP to relinquish the overlapping areas, however in August 2016, SSP filed a lawsuit against the provincial government and Kangaroo understands that as long as this remains outstanding, the government will not issue Clear and Clean status.

Kangaroo intends to commence drilling at the TA concession of the Pakar North project as soon as it has completed the required regulatory permitting. TA shares a common northern border with Bayan’s Bara Tabang concession which has been extensively drilled whereas TA only has 11 drill holes across the 5000 hectare concession.

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