PERTH (miningweekly.com) – ASX-listed Cokal has secured development funding for its 60% owned Bumi Barito Mineral (BBM) pulverised coal injection (PCI) coal project, in Indonesia.
Cokal on Wednesday told shareholders that it had executed a binding term sheet with Aahana Global Resources & Investment, a special purpose vehicle incorporated in the Mineral Energy Resource Group.
Under the terms of the agreement, Aahana will contribute all the necessary funding required to develop the BBM project to 50 000 t/m of saleable production, including the provision of cash, assets, mining equipment and contracting services.
The joint venture (JV) will remain in effect from first production, for the first five years, or a cumulative saleable production of four-million tonnes, whichever is soonest.
Aahana’s share in the JV will be 40%, and the company will be entitled to profits from coal sales, based on this shareholding.
Previous feasibility work on the BBM project has determined that a capital investment of $68-million would be required to develop a two-million-tonne-a-year openpit coal mine.
Cokal said on Wednesday that the company is preparing to upgrade the BBM Anak operation, with the construction of the BBM PCI coal mine, which will continue to operate the existing PCI openpit operation at a higher rate of production.
Initial site preparation will include the relocation of a suitable barge-loading port in close proximity to the mining operation.
Aahana and Cokal will review the mine plans and will agree on the selection of mining and barging equipment.
With an accelerated development timeline, first coal production has been targeted for the fourth quarter of this year.