(EnergyAsia, February 15 2013, Friday) — Canada’s Challenger Deep Resources Corp said its wholly owned subsidiary, PT Bestindo Energy, has signed an exclusive contract to mine and market coal from a project in central Kalimantan province in Indonesia.
The agreement with Indonesian firm, Kara Elmas Madenleri (KEM), “gives Challenger the exclusive right, for a period of 60 days, to conduct due diligence on the coal project” and to enter into a mining and production agreement.
“The mining operation-production agreement will give Challenger full control of all coal production and marketing within the KEM project area.”
The Toronto-listed miner said it expects to secure the full mining operation-production agreement with KEM later this month.
KEM fully owns the project located in the province’s Murah Teweh district, 12 km east of the Barito River which serves as the main transportation route. The area holds multi-seam high-quality thermal coal deposits supported by infrastructure to facilitate production and distribution through an existing 12km road and loading jetty.
Challenger said the coal can either be sold FOB barge at the jetty site or shipped downstream to a stockpile for direct loading onto vessels for export.
Ranjeet Sunder, Challenger’s President and CEO, said:
“The KEM project gives us the potential to generate near-term cash flow which will provide funding for our Tabang Project development and will enable us to capitalise on other high-quality opportunities, while minimising dilution to our shareholders during these difficult capital markets. We view this project as having very low risk and relatively low capital requirements which are both key elements in our Indonesian coal strategy.”
With offices in Calgary, Singapore and Jakarta, Challenger Deep Resources Corp is an exploration company focused on the coal industry in Asia.