Shares in Aim listed Churchill Mining jumped by 15% after the group released a feasibility study confirming 961 million tonne in proven and probable reserves at its Indonesia coal project.

Churchill proposes setting up a mine of 30 million tonne per year over 25 years at the East Kutai project in Kalimantan, although the reserve could support a longer mine life. The project will have its own port with storage of 852,000 tonne that will be capable of loading a variety of ships including Capesize vessels.

The company said that “The project can be constructed within a 24 or 36 month period followed by a ramp up in coal production over a further two-year period to the headline 30 million tonne per year capacity,”. The coal is high quality sub bituminous with an average calorific value of 5,135 kcal/kg on an air dried basis.

Operating costs are estimated at USD 25.10 per tonne FOB excluding a royalty of USD 2.32 per tonne. Mr Paul Mazak MD of Churchill Mining said that “The study indicates the project has a pre tax net present value of USD 1.8 billion.”

(Sourced from Argus Media)