Coal Asia Holdings has updated the valuation of mineable coal reserves within 400 hectares of the Davao Oriental contract area at US$99.7 million. The selected portion of the site represents just 3% of the 13,000 hectare concession area of within Zamboanga Sibugay.
This new evaluation means an earlier independent evaluation of the company has been significantly exceeded. Multinational Investment Bancorporation (MIB) valued the company at US$304.1 million considering the entire 13,000 hectares.
Coal Asia’s subsidiary Titan Mining & Energy commissioned a full feasibility study to re-evaluate two of the 11 identified coal-bearing basins within the contract area. An independent consultant assessed the Bactinan and Macopa coal deposits to update the value of the sites.
The updated study confirms proven reserves stand at 5 million tonnes which is just a fraction of the whole 123 million tonne resource and reserve identified in the Philippine Mineral Reporting Code standard geological report done in April 2012.
These two blocks were the subject of the preliminary feasibility study done in June 2012. Actual commercial production for these two sites is scheduled in the fourth quarter of this year and is projected to generate 500,000 million tonnes in the first full year of operations.
The Bactinan and Macopa deposits are expected to sustain a mine life of at least 10 years, but that is certain to increase to more than 50 years, once all 11 coal basins have been explored and mined as pairs.
Coal Asia chairman Harald Tomintz says he is satisfied with the positive results of the feasibility study and how it translates to the company’s valuation. “Despite the recent volatility of coal prices, the key financial indicators of the Bactinan and Macopa coal deposits, as determined by the feasibility study, speak volumes of the lucrative nature of this project. The valuation of the Bactinan and Macopa deposits alone already represents 103% of Coal Asia’s current market capitalization.
“There are over 6000 hectares from the Zamboanga Sibugay site and the remaining 6600 hectares from the Davao Oriental site. And to add to that, the effective mine life of the whole lot is equal to 50 years. This is not the end of the good news, rather just the beginning,” he says.