PAKAR

The Pakar Concessions consist of 9 contiguous concession areas that cover a total area of 35,572 Ha located in Kutai Kartanegara Regency, East Kalimantan. The concessions are PT Tiwa Abadi (TA), PT Tanur Jaya (TJ), PT Dermaga Energi (DE), PT Orkida Makmur (OM), PT Sumber Api (SA), PT Cahaya Alam (CA), PT Bara Sejati (BS), PT Apira Utama (AU) and PT Silau Kencana (SK).

Resources & Reserves :
Initial exploration work has enabled a JORC* compliant Report to be issued by PT Runge Indonesia in March 2011. The report estimated 16Mt of Proven Reserves, 428Mt of Probable Reserves along with 111Mt of Measured Resources, 1092Mt of Indicated Resources and 1816Mt of Inferred Resources. (*JORC 2004) The Sub-Bituminous seams exhibit low stripping ratios, shallow dip (<5 degrees) and thick coal seams ranging in thickness from 10-22 metres.

Logistics :
Coal haulage from the mining locations to jetty ≈ 36 – 69 Km.

Barging along Kedang Kepala & Mahakam Rivers to offshore transhipment point of the Balikpapan Coal Terminal (approx. 376km)

Status :
The concessions already have significant infrastructure built including intermediate coal crushing facilities, haul road and a  port area on the Kedang Kepala River. Applications for forestry permits (IPPKH) to enable mining prestrip works to commence are being prepared for submission.

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Kangaroo Resources and PT Bayan are parties to an access agreement and a strategic agreement under the terms of which Kangaroo Resources Group companies will have access to the haul road as well as the Senyiur Port at 30% of their available capacity (being up to approximately 9Mtpa by year-end although PT Bayan’s ongoing upgrade works could increase that capacity in the near future) on a ‘take or pay’ basis according to Kangaroo Resources forecasted requirements.  The Strategic Agreement provides a more formalised framework of cooperation and support to enable the parties’ coal mining projects to be co-developed in order to maximise use of the infrastructure and allow both PT Bayan and Kangaroo Resources Group to optimise outputs and profitability from their respective projects.

Each coal concession is held by a separate corporate entity.  Pakar North concessions are held by PT Tiwi Abadi (TA), PT Tanur Jaya (TJ), and PT Dermaga Energi (DE), whilst Pakar South concessions are held by PT Orkida Makmur (OM), PT Sumber Api (SA), PT Cahaya Alam (CA), PT Bara Sejati (BS), PT Apira Utama (AU) and PT Silau Kencana (SK).  The Pakar North concessions are located directly to the south of PT Bayan’s Bara Tabang concession and contain the highest quality coal amongst all of the Pakar concessions (≈ 3,800 – 4,250 Kcal/kg GAR).

As a prelude to a drill program expected to commence in the 3rd Quarter of 2018 and ultimately bringing the concession into production, Kangaroo Resources continues to compensate land on the TA concession. Approximately 35% of the total concession area of 4,996 hectares have been compensated to date with further land compensation activities to continue into the remainder of 2018, 2019 and 2020 for the Pakar North concessions of TA. TJ and DE, targeting commencement of production in 2020.

A permit was granted in May 2018, converting the non-forestry portion of the TA project area to production status. The Company will apply for upgrading the TJ permit to production status once feasibility studies including environmental impact assessment are completed in the 4th Quarter of 2018.

In September 2017, Kangaroo Resources announced updated Coal Resources and Coal Reserves (as at 31 December 2016) at its Pakar North and Pakar south concessions. The updated Coal Resources and Coal Reserves estimates were independently prepared by mining consultant, PT. RungePincockMinarco (“RPM”) and reported in accordance with the reporting guidelines of the 2012 Joint Ore Reserves Committee of The Australasian Institute of Mining and Metallurgy, Australasian Institute of Geoscientists, and Minerals Council of Australia (“JORC Code 2012”).

 

Table 1: – Coal Resources

Notes:

  • Tonnages are estimated on an in-situ basis
  • Mining method: Open Cut
  • A minimum seam thickness of 0.5m was used in the estimation process
  • The quality characteristics being Total Moisture (“TM”), Calorific Value, Ash, Total Sulphur (“TS”), Inherent Moisture (“IM”) and Relative Density (“RD”) for Pakar North, Pakar South and the Total have been calculated based on the weighted average total tonnages (i.e. sum of measured, indicated and inferred categories)
  • GAR = Gross As Received, AR = As Received, ADB = Air Dried Basis
  • Coal Resources are reported inclusive of Coal Reserves.
  • All Mineral Resources figures reported in the table above represent estimates at 31 December 2016. Mineral Resource estimates are not precise calculations, being dependent on the interpretation of available information on the location, shape and continuity of the occurrence and on the available sampling results. The totals contained in the above table have been rounded to reflect the relative uncertainty of the estimate. Rounding may cause some computational discrepancies.
  • Coal Resources were reported for individual seams and have been rounded to 50kt for Measured, 100kt for Indicated and 200kt for Inferred Resources, and total Coal Resources by category are rounded to 1Mt to reflect the overall accuracy of the estimates.

 

Table 2: – Coal Reserves

Notes:

  • Mining method: Open Cut
  • The coal produced is not washed resulting in 100% yield.  Therefore, the Coal Reserve is equal to Marketable Reserve.
  • The quality characteristics being Total Moisture, Calorific Value, Ash, Total Sulphur, Inherent Moisture and Relative Density for Pakar North, Pakar South and the Total have been calculated based on the weighted average total tonnages (i.e. sum of proved and probable)
  • All Mineral Reserves figures reported in the table above represent estimates at 31 December 2016. Mineral Reserves estimates are not precise calculations, being dependent on the interpretation of limited information on the location, shape and continuity of the occurrence and on the available sampling results. The totals contained in the above table have been rounded to reflect the relative uncertainty of the estimate. Rounding may cause some computational discrepancies.
  • The rounding of the Coal Reserve estimates is in accordance with the JORC Code which states: “Ore Reserve estimates are not precise calculations.  Reporting of tonnage and grade figures should reflect the relative uncertainty of the estimate by rounding off to appropriately significant figures”.  In this regard, totals have been rounded to reflect the order of accuracy of estimates.
  • GAR = Gross As Received, AR = As Received, ADB = Air Dried Basis

Table 1 and Table 2 were the subject of an ASX release dated 12 September 2017, “Updated Coal Resources and Coal Reserves for Pakar North and South Thermal Coal Projects, Indonesia”.  Kangaroo Resources confirms that it is not aware of any new information or data that materially affects the information included in the market announcement dated 12 September 2017 and that all material assumptions and technical parameters underpinning the Coal Resources and Coal Reserves estimates for Pakar North and South coal projects continue to apply and have not materially changed.