According to Mr Andrew McGeary Northland Capital analyst Churchill Mining is managing its legal costs well and it is well capitalised to continue pressing its legal case in Indonesia.

Mr David Quinlivan Chairman expressed the group surprise at the negative ruling from the regional authorities at a tribunal in March which has brought the development of the world class East Kutai coal project to a standstill.

The regional tribunal Churchill sought to overturn a move by a local authority to revoke the licences which host the East Kutai project. The company believes the negative ruling was fatally flawed, because it did not properly address a number of key issues raised during the hearing.

A subsequent appeal to the Administrative High Court in Jakarta was dismissed. Churchill is now pursuing an appeal to the Indonesian Supreme Court and it says it will continue to pursue all legal avenues available.

In today results Quinlivan told investors that Churchill will continue to vigorously pursue its claim for the full reinstatement of its rights in relation to the EKCP.

Mr McGeary said “If the company does not receive a satisfactory outcome it may ultimately pursue further claims via the international courts under bilateral investment treaties.”

He said that “Churchill continues to lobby at high levels backed by its new major Indonesian shareholders and board members, Mr Rachmat Gobel and Ms Fara Luwia.”

But according to Mr McGeary the key takeaway fact from yesterday results is the fact that Churchill still has a USD18 million fighting fund in the bank. He said that “Going forward the company is well capitalised to continue pressing its legal case.”

He added that “At present cash burn is predominantly of a legal nature but the company has managed these costs well, utilising its high level contacts and legal teams cost effectively.”

Mr McGeary surmised “While we point to strong cash backing and significant inherent value of the underlying assets if title can be effectively upheld, we maintain our caution given the uncertain outcome and timeline of legal proceedings underway.”

The analyst maintains a cautious view on the stock because of the ‘very uncertain’ legal backdrop in Indonesia.

(Sourced from www.proactiveinvestors.com.au)