The Indonesian Minister for Forestry has approved the Borrow and Use Forest Area and issued the In-Principal Forestry Permit (Izin Princip Ijin Pinjam Pakai Kawasan Hutan) for Cokal Limited’s 60%-owned Bumi Barito Mineral Coal Project (BBM) in Central Kalimantan.

This permit is the last stage prior to issuance of the Borrow and Use of Forest Area Permit (Ijin Pinjam Pakai Kawasan Hutan) which allows the company to start construction and mining.

An initial area of about 1242 hectares has been approved by the Forestry Department for operation of the port, haul road and initial mine site once the conditions of the In-Principal Forestry Permit are met. In accordance with standard Mining Department practice, the initial operational area is reviewed by the department and extended as required to meet the planned mine development.

Cokal’s chairman Peter Lynch says, “We are pleased that the final stage in forestry permitting is nearing completion. The effort of our team to achieve this milestone in the timeframe is testimony of the way in which Cokal has been able to work in a professional manner with stakeholders from all three levels of government.”

He says, “We have the ability to expand the operation from an initial 2 million tonnes/annum up to potentially 6 million tonnes of premium coking coal for future development and this considerably increases our confidence in the success of this exciting project.”

In addition to providing written undertakings regarding the payment of relevant taxes and rehabilitation, Cokal will spend the next 2 to 3 months completing the pegging of the Borrow and Use Forest Area and satisfying all conditions required by the In-Principle Forestry Permit. The timing of this will mainly be driven by the boundary pegging which requires about 2000 concrete boundary pegs to be put in place at the boundary of the initial Borrow and Use Forest Area.

In parallel Cokal will be finalizing the platinum loan documentation to enable final design and construction drawings for the project to be complete and long lead items order to be placed. This parallel process has been the basis of the construction plan which will enable production early in the second half of 2015.

BBM’s Production IUP covers 14,980 hectares, immediately adjacent to BHP Billiton’s Juloi tenement. The BBM tenement covers ground which has been zoned as production forest, which are areas designated by the Central Government of Indonesia to allow for forestry and mining activities by local and international companies.

The IUP straddles the Barito River and has numerous outcrops of bright coal. Coal core samples analysis has confirmed BBM coal to be a premium coking coal with Crucible Swell Numbers (CSN) values generally 9 or more.

The total coal resource estimate of 261 million tonnes at BBM comprises 10.5 million measured tonnes, 13.5 million indicated tonnes and 237 million inferred tonnes.

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