Pan Asia Corporation Limited (ASX:PZC) Updates On The Acquisition Of Coal And Manganese Assets In Indonesia
Perth, Dec 16, 2009 AEST (ABN Newswire) - Pan Asia Corporation Limited (ASX:PZC) provides this important update on the review of the extensive portfolio of projects being acquired from Innovation West announced to shareholders on 23 November 2009. The Company's executives have recently returned from visiting the highest priority projects and it is clear that the proposed acquisition of projects represents a significant company changing growth opportunity.
The Company believes the suite of assets being acquired is a platform to build a significant Indonesian-focussed resource company with increasing thermal coal production from a number of operations. The extensive pipeline of coal and manganese exploration projects provides the Company with exposure to vast parcels of prospective ground in the prolific coal fields of eastern Kalimantan, as well as the emerging manganese province on Flores Island and West Timor. It is expected that exploration activity, including drilling and detailed project evaluations will begin in the coming weeks.
Due to the large number of projects under review, the company prioritised the projects on the basis of first assessing those in production, near development stage or with high priority exploration status. The other projects, while prospective, will necessarily be assessed in detail at a later stage.
PROJECT DETAILS:
Jasa Tambang Nusantara ("JTN"), East Kalimantan: In Production
The JTN concession is located in eastern Kalimantan, approximately 75km SW of Balikpapan. The concession covers 2,750Ha, with a small open pit mine currently producing around 20,000* tonnes per month of sub-bituminous thermal coal with typical analysis (air dried basis): 5,600-6,000 Kcal/kg, 0.3-0.7% total sulphur, 8-10% total moisture, 4-8% ash. Observations from site indicate the current mining activity is in the early stages of extracting two near-surface coal seams with thicknesses varying from 0.8-4m. The seams dip shallowly to the south east at 80-150.
JTN owns and operates coal handling and barge loading infrastructure approximately 7km from the mine site where it currently loads shipments twice weekly. Loading capacity is presently rated at around 200tph.
PZC plans on implementing expansion plans to ramp-up production to 40,000* tonnes per month over the coming 3 month period. Additional plant and equipment will be mobilised to site to assist in achieving this goal, with the existing infrastructure capable of handling the increased throughput.
In addition, PZC will commit to undertake a detailed near-mine drilling program in order to assess the potential for further production expansions and optimising future mine planning and scheduling. Drilling will focus on the estimated 6km of inferred strike length of coal seams on this concession.
CV BUNGA BONE ("CBB"), East Kalimantan: In Development
The CBB Project has a recent history of small-scale production and sales of sub-bituminous thermal coal from a 100Ha concession area located approximately 30km SE of Samarinda, Eastern Kalimantan. Barge loading infrastructure with a capacity of approximately 20,000-30,000* tonnes per month is located 7km from the mine site and is ready for immediate start-up. Coal quality is expected to be in the range of 5,600-5,800 Kcal/kg, 10-15% moisture, 5-10% ash and 0.5-0.8% sulphur.
With some additions to the existing mining fleet and infrastructure, the Company is aiming for an initial production target of 50,000* tonnes per month.
Four coal seams have been identified at CBB, with thickness varying from 1.1m to 5m and dipping at 12-180 to the SE. A significant amount of near-surface coal has recently been exposed and is ready for extraction. The Company is also acquiring drilling data which will be further verified by additional drilling to take place in the first quarter of 2010.
ARCHIPELAGO TIMOR PERKASA ("ATP"), East Kalimantan: In Development
A significant amount of mine development has been undertaken at ATP, with the extraction of 100,000t* of coal within the last year. Coal is present in seams up to 5m thick which exhibit high calorific values, up to 6,700 Kcal/kg. The sulphur content is elevated such that this coal will require blending with lower sulphur coals, such as material from JTN, to produce a saleable product. The coal seam outcrops intermittently over a 3km strike length, some of which has been drilled by the project vendor.
The 3,930Ha ATP concession is located approximately 90km SW of Balikpapan and has direct access to owned and operated barge loading infrastructure.
A significant near-mine exploration and resource delineation program is being planned for ATP. The Company believes this coal will add significant value as a blending coal with other projects nearby, particularly JTN.
ABADI PANDU SELARAS ("APS"), Central Kalimantan: High Priority Exploration
An exploration application has been submitted over an 8,000Ha area in Central Kalimantan which is targeting coking coal and high quality thermal coal.
Further exploration and evaluation work is planned to begin within the coming weeks to ascertain the aerial distribution of outcropping coal, with a drill program designed to define the size and prospectivity of this area.
SARANA MANDIRI UTAMA ("SMU"), East Kalimantan: High Priority Exploration
The 5,250Ha SMU concessions are located in the north of Kalimantan with easy access to the adjacent river system. The Company is acquiring a significant amount of drilling data which will be verified by additional drilling undertaken by the Company in the coming weeks. The Company believes the SMU concessions appear highly prospective for the rapid delineation of potentially large areas of near-surface thermal coal.
An initial production target of 40,000* tonnes per month appears feasible.
BHARATINDO MINERALS MANDIRI ("BMM"), Sumatra: High Priority Exploration
The 4,500Ha BMM concession is a greenfields project area which the Company believes has excellent potential to host near-surface thermal coal. The project vendor reports a near-continuous coal seam outcropping for over 1.6km. Coal quality analysis and seam thickness information is not yet available, however will be investigated further by the Company early in 2010. The area is serviced by several logging roads with only slight topography.
Manganese concessions, Flores Island, West Timor NTT: High Priority Exploration
A number of manganese concessions covering more than 15,000Ha are being acquired as part of the Innovation West transaction. These projects are located in Flores, West Timor, East Kalimantan and Sumatra.
Following the site visits undertaken by the Company's technical staff, the concessions on Flores Island are considered highly prospective for the discovery of in-situ primary manganese deposits. Figures 11 and 12 illustrate massive manganese oxide (pyrolusite) contained within a large boulder as part of a small landslide. The size of the boulder and the morphology of the immediate area suggest this boulder has not travelled far from its source. Detailed geological mapping and prospecting will be undertaken in areas directly upslope from this boulder with the aim of identifying the original source rocks.
Additional exploration work will be carried out on the concessions in West Timor to fully understand the geology of this region and ascertain the prospectivity for hosting primary manganese deposits of significant size. Recent site visits indicate predominantly alluvial manganese occurrences in these concessions.
Coal Terminals / Infrastructure
The executives visited the Samboja site and met with representatives of the state owned company specialising in sea barge loading facilities. The review of feasibility data is ongoing and future updates will be provided as further progress is made.
PZC joins with Mr Gerald Nirahuwa to mine, develop and explore for coal and manganese
A key part of the acquisition is the joining with Indonesian partner Mr Gerald Nirahuwa who has over 12 years experience as a coal mining contractor/owner operator in Indonesia. His extensive and strong-on-the-ground network secures and enhances the opportunities provided and establishes a pathway for further opportunities.
Our Indonesian partner's local presence complements the project management, exploration planning and financial market capabilities of the Pan Asia group.
The Company's overall growth approach is to support and expand current initial production, while planning and aggressively undertaking modern exploration on the significant high potential land holdings with a view to building significant JORC tonnages and shareholder value.
Corporate Update
The Company is positioning to quickly become a significant participant in the Indonesian mining industry and indicative milestones are set out below:
Corporate:Finalisation of technical andlegal due diligence Jan / Feb 2010Notice of extraordinary meeting February 2010Shareholder approval obtained Feb / Mar 2010Completion of transaction March 2010Allotment of shares to vendors March 2010Australian / European presentations Jan - Mar 2010Operations:Management and executive reviewof operations in Indonesia ongoingDrilling and assaying of drillingprogramme results on 4-5 projects Jan - Mar 2010Takeover of coal and manganese operations March 2010
Legal Due Diligence
The Company advises that legal and technical due diligence on the projects / acquisition of Innovation West Pty Ltd is ongoing and will update the market as to further progress.
The Company will seek all regulatory and shareholder approval in respect of this transaction.
* The above production results and targets are based on information provided to the company by the vendors during the due diligence process.
For the complete Pan Asia Corporation ASX Announcement and Figures, please click the link below:
http://www.abnnewswire.net/media/en/docs/61954-ASX-PZC-474256.pdf
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