Cokal (CKA) has received a conditional proposal for a debt financing facility of US$150m from an international consortium including Platinum Partners. The facility will be used to fund CKA’s 2Mtpa Bumi Barito Mineral (BBM) Project in Central Kalimantan, Indonesia. Impact This is an excellent result for CKA as it now enters into detailed negotiations on the proposal. The current agreement is a nonbinding Memorandum of Understanding (MOU) and is subject to various terms and conditions including the completion of Technical and Legal Due Diligence and obtaining the necessary regulatory approvals for the project to proceed. The final outstanding major approval is the Production Forestry Permit or the Izin Princip Ijin Pinjam Pakai Kawasan Hutan Exploitasi. CKA has successfully completed a number of significant interim steps and it believes it is close to obtaining the permit from the Indonesian Forestry Ministry. The fund are more than enough to complete the 2Mtpa mine and associated infrastructure and as a result we are upgrading our recommendation to Buy (previously Hold) with a revised price target of $0.28/share (previously $0.19/share).
CKA Price at posting:
19.5¢ Sentiment: LT Buy Disclosure: Held
