T +61 2 8319 9299
Level 5, 56 Pitt Street Sydney NSW 2000
ABN 55 082 541 437 (ASX: CKA)
24 April 2019
QUARTERLY REPORT FOR THE THREE MONTHS
ENDING 31 MARCH 2019
•BBM rehabilitation report submitted
•BBM work plan (RKAB) submitted and accepted by government
•Preparations for BBM mining operations continue
(PT Bumi Barito Mineral (BBM) – 60% interest)
BBM’s permit covers an area of 14,980ha with multiple seams of high quality metallurgical coal. BBM has all
regulatory approvals in place including:
•Mining Licence – 20 years with two further extensions of 10 years each
•Environmental approval for a mining rate of 6Mt per annum
•Port construction approval
•Forestry Permit to commence mining activity
Since all permits for mining are in place, BBM is the first area to be mined by Cokal commencing with PCI coal production from Pit 2, with the addition of coking coal production from Pit 3 as further infrastructure is developed.
BBM is dissected by the Barito River which cuts through the tenement in a
Updated rehabilitation plans were submitted as required by the government.
Work plan for 2019 submitted (RKAB). This was approved by the government in February (Directorate General Minerals and Coal).
No exploration activity, mining production or development was conducted by Cokal during the quarter.
(PT Tambang Benua Alam Raya (TBAR) – 75% interest)
TBAR’s exploration authority covers an area of 18,850ha immediately adjacent to and south of Cokal's BBM
tenement. Over 80% of the lease is available for exploration subject to the issuance of an exploration forestry permit. The application of exploration forestry permit was submitted in 2014 and continues to be processed by the Environment and Forestry Ministry of Indonesia. Following its transfer process from Murung Raya to Provincial
Government, Cokal continues its efforts to acquire regulatory approval for the IUP (exploration license) upgrade process application to a Production and Operation IUP, equivalent to a mining licence.
Outcrop mapping of four seams over 17km indicates a substantial resource of high grade coking coal in this deposit. These seams correlate to the B, C, D and J seams in the adjacent BBM deposit.
No exploration activity was conducted by Cokal during the quarter.
(PT Borneo Bara Prima (BBP) – 60% interest)
Cokal's BBP project covers 13,050ha in Murung Raya Regency, Central Kalimantan. BBP has been granted an Exploration Forestry Permit (IPPKH) and has been confirmed on the Central Government’s Clean and Clear list. The IUP was transferred to the Central Government where it now awaits approval to be upgraded to a mining licence (Production and Operation IUP).
Received business license decree for operation foreign mining production (IUP OP PMA) from capital investment coordination board centre (BKPM) on 22 February 2019.
Submitted work plans and the budget (RKAB) 2019 to the government (Directorate General Minerals and Coal).
No exploration activity was conducted on BBP during this period.
(PT Anugerah Alam Katingan (AAK) – 75% interest)
Cokal's AAK project covers 5,000ha also in Central Kalimantan. Applications for the Exploration Forestry Permit (IPPKH) and Clean and Clear Certificates continue to be processed. Cokal continues to monitor the progress of the regulatory upgrade approvals for AAK.
No exploration activity was conducted on AAK during this period.
PREPARATION FOR MINING OPERATIONS IN BBM
Cokal’s CEO, Jim Coleman, and his team continue to develop a plan for the start and ramping up of production at BBM. Reconsideration of mine development strategy may require the revision of the Definitive Feasibility Study (DFS) to:
•Provide for barging from the mine to reduce transport costs
•Consider the incorporation of highwall mining to increase recoverable reserves
•Consider the development of a small fluidised bed power station fuelled by washery reject and carbonaceous shale in Pit 2 overburden.
The future DFS referred to above will not delay currently proposed mine implementation.
The plan is working towards the commencement of production of PCI coal in Q2/Q3 of 2019. It is proposed to progressively increase production over the following 18 months to a rate of 2Mt/a1 and to include both PCI coal and coking coal in the production mix.
1Refer ASX Announcements 2nd November 2016 and 1st August 2017– the Company is not aware of any new information or data that materially affects the information contained in these announcements
The proposal includes the construction of
Stage 1 – Develop Pit 2: Q2/Q3
•Construct 800m road to existing (temporary) port
•Mine PCI coal in Strip 1 Pit 2, free dig
•Strip 2 Pit 2 not free dig but can rip and load overburden at least in a narrow strip
•Strip 2 design details dependent on geotechnical analysis after drilling
•Reclamation on the first mined out area (0.7 Ha) will continue with a stable batter slope to the riverside
•This slope has already been planted from the Cokal nursery established for this purpose.
•This will continue as the pit develops.
Stage 2 - Develop Krajan temporary Port, start Pit 3, maintain PCI coal mining from Pit 2:
•Upgrade the 6.2km exploration road Krajan to Pit 3
•One bridge on this road has already been repaired for light traffic
•Develop 2.3km road from Pit 2 to Krajan
•Construct truck dump hopper, feeder breaker and stacker at Krajan
•Simple coal beneficiation plant required for coking coal from Pit 3
•Develop blending stockpile 2 x 80,000t at Krajan
•1,200m long 1,000 t/h conveyor to barge loader
•Construct 1,000 t/h barge loader for shallow draft barges
•Obtain blasting permit
•Obtain forestry permit for Eastern Part Pit 2
•Commission Krajan temporary barge loader Q4 2019
•Commence mining coking coal from Pit 3.
Stage 3 – Develop permanent port at Krajan, Expand Pit 2 and Pit 3
•Complete permanent facilities at Krajan port
•Pit 2 extended into the eastern area
•Pit 3 expanded by end 2020
•Evaluate carbonaceous zone above Seam D as potential power station fuel
•Evaluate highwall mining
•Total BBM saleable production 2 Mt/a by Q4 2020 2
BBM Pits 1, 2 and 3, Roads to Krajan Port, Barge Loader
Carbonaceous Zone Above D Seam
2Refer ASX Announcements 2nd November 2016 and 1st August 2017– the Company is not aware of any new information or data that materially affects the information contained in these announcements
SHALLOW DRAFT BARGING
Cokal is preparing a detailed budget to improve 28 sites along the upper Barito River for channel improvement to increase the number of annual operating days the river is suitable for barging. This is intended to develop a 75m wide channel to be used by barges and push boat capable of operating in water only 2m deep.
The Upper Barito River is Abundantly Wide for Barging
Negotiations with a Vietnamese shipbuilding company have agreed on the design of barges capable of carrying 1,750 tonnes coal in 3m water and 1,000 tonnes when the water is 2m deep. The design of the appropriate push boat has also progressed and agreement is close.
It is expected commercial negotiations will commence in Q2.
Shallow Draft Push Boat
Four Shallow Draft Barges – 1,750 tonne Capacity each.
It is intended that the proposed cooperation with the Vietnamese barge company will include Meratus Advance Maritime (MDM) with whom Cokal has had a long standing relationship.