news, page-25

Kangaroo to sell
GPK coal project

Australia-listed coal producer
| , Kangaroo Resources
/A L'Imited (KRL) is planning
to sell its 84.82 percent
stake Graha Panca Karsa (GPK) thermal
coal project in West Kutai regency, East
Kalimantan to any interested parties.
"As we know, the negotiations with
a few parties including Indian firm are
in advancing," the industry sources told
Petromindo.com recently, without giving
further details.
The company has appointed
Macquarie Bank Singapore to manage a
process by which interested parties are
able to review the project and consider
any further involvement.
According to KRL's September 2010
statement said: "The commercial review
of the GP coal project is continuing
and KRL is presently considering a
number of options. This process has been
ongoing for some months due to the
range of possible options available and
the high leveler interest received from
third parties."
The mine, which has obtained IUP an
Exploitadon Licence started production
since January 2010. KRL has delivered
its first 4200 tons barge of coal to the
Cahaya Fajar Kaltim power station in
East Kalimantan. It targeted to produce
up to 100,000 tons of thermal coal per
month by early 2011, and ultimately up
to 3 4 million tons per annum (Mtpa)
by 2012.
KRL acquired in Oct. 2009 mining
and selling right of a thermal coal
project from concession owner PT
,GPK for US$2 million. To adequately
secure the rights to the GPK project,
ERL has entered into a separate Deed
of Termination and Release with KAL
Energy, Thatcher Mining Pte Ltd Ca
wholly owned subsidiary of Kal Energy)
and GPK.
Thatcher had entered into various
historical agreements relating to the GPK
project and the Deed of Termination and
Release will result in those agreements
being released in full. The Deed of
Termination and Release.grants ERL
a license to use the information in the
historical JORC compliant resources
reports prepared by Kai Energy. In
addition, ERL will own all mining
information reladng to the GPK Project
(including the JORC .reports) once the
proposed settlement payments have been
made to Kal Energy.
KRL has agreed to pay Kal Energy
a total of $5 million under the Deed of
Termination and Release.
The GPK project has a current JORC
resource of 248 million tonnes (MT) of
coal with an average calorific value of
5,245kcg (adb), comprising 141 Mt
as an Indicated Resource and 107 Mt as
an 'Inferred Resource.
142 MT of the coal resource
is at depths of less than 60 meters,
thus a likely high resource to reserve
conversion, with expected low strip
ratio while coal quality indicat,es low
sulphur and ash levels, with an average
calorific value of approximately
5,245kcg (adb).
The project is located 15 kilometers
from the Mahakam River, a large inland
river in East Kalimantan that facilitates
the development of infrastructure,
including road and port facilities, for the
transportation of coal.
The company said it will conduct
a drilling campaign to increase the
confidence in the JORC resource to a
measured category to allow a mining
plan to be generated for the planned
production ramp up.B

start production in 2011 with initial
production up to 50,000 tons per month,
and then aims to boost its coal output to
up to 4 MTPA, starting in 2012.
The Tanur Jays mine is an advanced
coal concession located a short distance
to the north east of Kangaroo's existing
GPK mine.
Kangaroo announced an agreement
with its Indonesian partners to acquire
100% of the Kubah Indah Coking Coal
Project in late 2009, subject to due
diligence and shareholder approval.
The Kubah Indah project will
ul `tunately compHse a number of
separate concessions in close geographic
proximity, serviced by a single
production huh, targeting both coking
coat and high quality thermal coal.
The company received notification


initialconcessions relating to this project
in the first Quarter 2010 and commenced
due diligence over these concessions.
The company announced the completion
of due diligence in May 2010, clearing
the way for outstanding shares to he
issued under the agreement to complete
this transaction.

notification from a third party, a large
multinadonal, alleging that part of the
initial three exploration licenses for
the Kubah Indah Coking Coal Project
overlap licenses held by them. These
allegations also claim that the licenses
held by the third party have priority over
the licenses granted to the company's
Indonesia partner.
The company is confident in the
position held by its Indonesian partners
and is conducting further due diligence
as necessary to resolve this issue.
The mine is located lOOkm from
the Mahakam River. The company is
expected to start coal production in 2012
and will produce up to 2 MTPA starting
in 2013.
Other Kangaroo projects are the
Jawana, Borami, Mitts Bara Karsa


diligence on these four mines in May
2010. The process of completing the
transactions for these will take place in
the near future, subject to a shareholder
meeting.
Exploration work on these projects
will be prioHtized and may commence in
the second half of 2010 once the second
available and'Kangaroo will aim to
add the Jawana and Borami operations
to its overall Mamahak production hub
during 2011.
The mines are located adjacent to
Mahakam river.
The Jawana and Boromi projects,
which have a combined area of 30,000
hectares of land, are expected to start
production in 2012 with a production
target of up to 1 MTPA starting in 2013.
Meanwhile, MBK and By are
expected to commence production next
year with an initial production around
250,000 tons in 2011. The location is
about 20 kilometers from the Mahakarn
river.
So far, the company has shipped
three trial shipments containing a total
of 150,000 tons to a Chinese energy
company, Guandong Yudean Farnon
Investment Co. Ltd (Yudean Famon).


services agreement with an Australian
mi 'rung consultant, ASEAMCO Pty Ltd,
to deliver key mining and operational
support services across its East
Kalimantan coal'projects portfoBo.
"The new agreement has been
negotiated as payment partly in cash and
partly in Kangaroo shares at the election



COAL ASIA NOV.15 - DEC.15, 2010

7r angaroo has made
, aggressive coal mine
acquisitions in East
, Kalimantan since
mid-2OO9. Currently,
the company has two producing coal
mines, Graha Panca Karsa (GPK) in the
West Kutai regency and the Mamahak
coking coal project. Another six coal
mines are preparing to complete their
coal concessions after successfully
conducting due diligence.
The company acquired an 84.82%
stake in the GPK mine in October
2009 from concession owner PT GPK
for US$2 million. The mine started
producing coal in January 2010 and set
a target to produce up to 100,000 tons of
thermal coal per month by early 2011,
and ultirnately up to 3-4 MTPA in 2012.
The JORC resource at the GPK mine
was 248 million tons (MT) of thermal coal,
including an indicated resource of 141 MT
and an inferred resource of 107 MT.
The V.ompany said its Indonesian
partner will finalize coal off-take
agreements with PT Indonesia Power,
a subsidiary of state electricity firm PT
Perusahaan Listrik Negara (PLN).
The project is located 15km from
the Mahakam River, a large inland
river in East Kalimantan that facilitates
the development of infrastructure,
including road and port facilities, for the
transportation of coal.
Kangaroo is also considering
all options, including potential joint
ventures and a possible sale for the GPK
coal project.
"In order to give the sale op&On more
credibility and enhance any potential
outcome, ERL has given a mandate to
Macquarie Bank Singapore to manage a
process by which interested parties are
able to review the project and consider
any further involvement," the company
said in July 2010.
For the Mamahak coking coal
project, the company bought an 85%
interest in Canadian firm SouthGobi
Energy Resources Ltd la December 2009
for US$1 million in cash aad 50 million
shares of Kangaroo. The mine has started
producing coking coal and expects to
ramp-up to a steady state level of 50,000
tons per month by the end of 2010, an
annualized target of up to 1 MTPA.
The company expects tO finalize its
first shipment of around 60,000 tons of
coking coal before the end of this year tO