Bumi Barito Mineral (BBM)

Cokal owns 60% of the Bumi Barito Mineral (BBM) project located in the Central Kalimantan Province of Indonesia with multiple seams of high quality metallurgical coal.  The permit covers an area of 14,980ha within the highly prospective Central Kalimantan coking coal basin, adjacent to Indomet’s extensive coking coal tenements.

The BBM permit area is bisected by the Barito River.  It will be the first deposit to be mined by Cokal, starting with the areas east of the river, shown in Figure 2 as Pits 1, 2, 3 and 4.

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 up to 6Mt per annum.
◼ Forestry Permit to commence mining activity.
◼ RKAB approval of its annual plan.

The Company has developed a 5-year mine plan to be implemented in 2020 including:
◼ Refurbishment of the existing 65-man camp at Krajan.
◼ Construction of a road to evacuate product coal through an intermediate stockpile (ISP) at Muara Lahung, 165km downstream from Krajan.
◼ The mining of 2 Mt/a saleable coal from the third year of production.
◼ A Coal Handling Preparation Plant (CHPP) at the mine site to prepare coking coal and PCI coal for sale.
◼ Progressive rehabilitation of mined out areas as mining advances.

Coal Evacuation to Market

Cokal will haul product coal 100km from the mine to an ISP and barge loader at Muara Lahung to bypass the most difficult parts of the Upper Barito River.  A barging company, HSM Marine, is being contracted to use shallow draft 3,000t barges which can operate in 2 to 2.5m deep water to deliver coal to a point below Muara Teweh bridge from where it will be transferred to 10,000t river barges for the voyage down river to Kelanis.  It is anticipated that from Kelanis to ships standing offshore coal will be transported using conventional barges.

No land coal storage is being developed for BBM apart from stockpiles at the mine and at the Muara Lahung ISP.  Surges in coal delivery may be accommodated using moored barges.  Some improvements in the river channel at a later date will enable barging from Krajan.

Coal Quality

BBM will produce high quality PCI and coking coal.  Characteristics of all product coal from BBM will be low ash, low sulfur, low moisture, ultra low phosphorus and, for coking coal, high swell.  The coal contains more than 90% vitrinite.  The PCI coal will not need to be beneficiated.  Coking coal will either be screened or jig washed to extract the high ash partings, anticipated yield 85%.

JORC Code Statements

There has ben no recent exploration activity in the field on any of Cokal’s assets.  Consequently the JORC Resources Statement for the BBM Project of 29 April 2016 remains current. The total Resource estimate for BBM is 266.6Mt comprising 19.5Mt Measured and 23.1Mt Indicated Resources respectively with the balance of 224Mt at Inferred status.   Only seams East of the Barito River were included in this assessment of Resources and Reserves.

The JORC Reserves Statement for the BBM deposit of 28th of July 2017 remains valid.  The highlights of this Reserve statement are:
◼ Coal Reserve estimate of 20.2Mt of open pit Run-of-Mine (ROM) Reserves for BBM, producing 16.9Mt of Marketable Reserves in accordance with the 2012 JORC Code.
◼ The above Coal Reserve estimate comprised 13.0Mt Proved and 7.2Mt Probable ROM Reserves for B, C, D and J Seams at US$150/tonne.
◼ Marketable Coal Reserves comprise 12.7Mt Coking Coal Product at US$150/tonne and 4.2Mt PCI Product at US$112.50/tonne.
◼ B, C and D seam Coking and Premium PCI (low Vol) products have premium qualities comprising low ash, low Sulphur, low moisture and ultra-low phosphorus.
◼ J seam Coking Coal has premium qualities comprising high swell, low ash, low Sulphur, low moisture and ultra-low phosphorus.
◼ Low Volatile PCI and medium to low Volatile Coking Coal are suited to nearby Asian markets.

The J Seam Reserves comprise 5.5Mt Proved and 3.2Mt Probable Marketable Coal Reserves and is all coking coal.  The B, C and D Seam Reserves comprise 3.0Mt Proved and 1.1Mt Probable Coking Coal Marketable Reserves, and 2.4Mt Proved and 1.7Mt Probable PCI Marketable Coal Reserves.

Economic Reserves were determined using the Definitive Feasibility Study prepared in 2014 by Resindo, updated to reflect reduced fuel costs and depreciation of the Rupiah in November 2016 (see ASX Announcement 2nd November, 2016).

Coal analyses from more than 130 outcrops on the West side of the Barito River indicate that extensive quantities of premium quality anthracite and PCI coals occur there.  This coal does not currently form part of evaluated BBM coal Resources and Reserves.  It is believed these are the same seams that occur in the East block.