Overview

The objective of the Berau Thermal Coal Project is the successful development of a mine producing up to 3Mt of thermal coal per year. 

Key Project features:

• Concession area of 5,000 hectares in East Kalimantan, Indonesia.
• JORC Resource of 27.7Mt of thermal coal with medium calorific value ([5,600] kcal/kg gross as received) with low sulphur, ash and moisture.
• Substantial further exploration potential.
• Required capital expenditure of US$ 20 million.
• Projected operating expenses of US$ 41 per tonne.
• Mining reserve of 7.7Mt from 10.4 Mt of JORC Resource at Nyapa West.
• 7-8 months construction time from investment decision with further 2 months till first shipment.

The operation will involve mining and transporting run of mine coal by truck approximately 30 km along a proposed road to a barge port to be constructed on the Segah River, where it will crushed directly on to barges. Barges will then transport  the coal  approximately 90km to the coast and then on to a trans-shipment point 30km offshore, where it will be offloaded to ships for delivery to customers.

Location and Geography

The Berau Thermal Coal Project is located in East Kalimantan, Indonesia, 40 kilometres south-west of Tanjungredeb (Berau).

Strike’s Interest

Strike’s holds 100% of the rights to mine a coal concession (IUP), subject to paying a royalty to the IUP owner. The position adopted by the Company’s partner has raised uncertainty about whether negotiations will succeed and dispute resolution proceedings are now likely.  An investment go-ahead decision by Strike is pending the successful completion of these negotiations and/or proceedings. 

Mine Planning

A life-of-mine plan for the deposit located on the western side of the Kelai River (Nyapa West Block) has been developed with consultants PT Runge.  The mine pit will cover an area of approximately 124 hectares and is estimated to have an average strip ratio (over the life of the pit) of 9.2:1 (i.e. 9.2 bank cubic metres of overburden will be mined for every 1 tonne of coal).

The mine will be designed to target production of 1.5 Mt of coal in the first year, expanding to produce at a rate of 3Mtpa in subsequent years.

Mining will be an open-pit operation undertaken by contract miners. Equipment used will be conventional truck and shovel, with some blasting as necessary. Mined coal will be blended on site to meet customer specifications.

Transport Infrastructure

Road

A 30 kilometre road will be constructed for the transport of the coal to the barge port. The route has already been identified and mapped with approximately half of the road utilising existing logging roads, which will reduce construction time and costs.

Barge Port

A site for the barge port on the Segah River has been identified and the land purchased.

The port site will accommodate a 60,000 tonne stockpile, with capacity for expansion. Coal will be loaded onto 5,000 tonne barges by conveyor.

The port will also have a fuel discharge facility so that fuel for mine operations can be offloaded from barges and transported to the mine by truck.

The Segah River is used extensively for transporting coal by miners in the region. The following photograph illustrates a similar coal-loading facility on the Segah River to the facility proposed by Strike.

The Segah River is used extensively for transporting coal by miners in the region.

Coal will be barged 90 km down the Segah River to the coast and then a further 30km to an offshore trans-shipment point. Here it will be loaded onto ships for delivery to customers. The following picture illustrates a ship-loading operation similar to the one to be conducted by Strike.

Geology

The Nyapa Coalfield is located in the southern Berau Sub‐Basin. The identified Coal Resources occur within a sequence of mudstones, siltstones, sandstones and conglomerates - correlated as being within the Latih Formation of Miocene age.

A series of faults are interpreted to traverse the deposit. The figure below is a drill hole and geology map of the Berau concession. Both the sandstone (yellow) and mudstone (green) are highly prospective lithologies.