Cokal (CKA)

Shares / Stock Code

CKA

Stock Exchange / Sharemarket

ax

Cokal (CKA) is coal explorer which is developing coking coal assets in Kalimantan, Indonesia. Cokal Limited (Cokal) is an emerging ASX listed coal company, with high margin metallurgical coal as our key focus. Cokal was listed on the Australian Securities Exchange (ASX) on 17 April 2000.

Cokal commenced business as Jack Doolan Capital Pty Ltd (JDC), a private company, formed primarily by the current Board and like-minded people. In December 2010, JDC was acquired by the ASX listed Altera Resources Limited (AEA), with the Board of JDC assuming the control of AEA. Altera Resources Limited, was renamed Cokal Limited (ASX: CKA) in February 2011, better reflecting its ambitions to become a global metallurgical coal business. Cokal holds interests in coal exploration tenements in Kalimantan (Indonesia), Tanzania and in the Clarence - Moreton, Surat and Bowen basins in Australia.

Cokal is building a portfolio of assets which will deliver high value access to quality metallurgical coal.  Proving up resources, for early production, within the metallurgical coal basins of Central Kalimantan and Eastern Africa, is our priority. Our growth strategy is built on the swift development of our key tenements, and prudent acquisition of further quality assets.

Kalimantan Project
The projects comprise four coal exploration concessions in Central Kalimantan Province. SRK understands that the projects are currently owned by two Kalimantan based business proprietors. The principal sources of information for all four tenements are an exploration report for each concession, commissioned by the tenement owners. None of the reports are authored. The PT BBM and PT BBP reports are more comprehensive and more coal assay data is available for these tenements. The PT AAK and PT AAM reports are less detailed and contain less coal quality information.

Geologically, the four concessions are located in or around the margins of the North Barito Basin in Central Kalimantan and are prospective for coal measures of Eocene age. Most of the areas where Eocene coals outcrop have a moderate to high regional level of coal rank. Coking coal deposits are known to occur within parts of the Northern Barito Basin in Central Kalimantan. In particular the PT BBM and PT BBP coal projects are situated proximal to known coking coal deposits.

PT Bumi Barito Mineral (BBM)
The project is located in the North Barito Basin, immediately to the south of PT Juloi Coal (BHP 75%, Adaro Energy 25%). Only limited exploration has been undertaken on the concession to date, consisting of a general geological survey which was commissioned by the tenement owners in 2008. The initial geological investigation in the concession area has identified two main coal horizons, each comprising at least four individual seams with a composite coal thickness of 3-4 m in each horizon. Based on the regional geology mapping data for the area, the seams occur within a formation considered to economically prospective for economic coal seams (Haloq Sandstone). Coal quality analysis indicates that the coals are of low volatile bituminous rank (ASTM), with low ash, low sulphur and high calorific value. Given the location of the BBM concession and the available coal quality data, a range of products may be possible, from a high quality export thermal, to a PCI or coking product.

The ash and sulphur contents of the analysed BBM coals are comparable with those reported in NW Juloi tenement. However, the reported volatile matter of the NW Juloi coals is considerably higher than that of the BBM coals. The generally low volatile matter may impact the coking potential. Further analyses (CSN, fluidity, dilation) are required to test the suitability of these coals for a coking product.

Further work is required to allow the identified coal measures to be upgraded to Resources in accordance with the JORC Code (2004). This will require further outcrop mapping, an exploration drilling programme, detailed topographic mapping and additional verification of coal quality analyses. Further investigation of the Haloq Sandstone in the northwest and northern parts of the concession, adjacent to PT Juloi Coal may identify coal seams additional to the outcrops found near the Barito River.

PT Borneo Bara Prima (BBP)
The project is located in the North Barito Basin to the west of the Maruwai Coal Project (BHP 75%, Adaro Energy 25%). The Maruwai Coal Project hosts the Lampunut coking coal deposit in the Batu Ayau Formation immediately to the southeast of the eastern PT BPP project area. Exploration activities to date have comprised an initial reconnaissance mapping programme which has identified the presence of up to three coal seams in the undivided Haloq Sandstone and Batu Kelau Formation in the south central area of the concession. The coal seams are generally thin. Analyses of outcrop samples to date indicate a low ash, low sulphur coal with excellent specific energies. The ash and sulphur are comparable with those reported at Lampunut (Batu Ayau Formation), however the Lampunut coals have considerably higher volatile matter than the BBP samples analysed to date. The generally low volatile matter of the outcrop samples analysed to date may impact the coking potential of these coals, and further metallurgical coal analyses are warranted to test the suitability of these coals for a coking product.

Further field mapping may identify better seam thickness development along strike of the mapped coal outcrops and there is potential for the discovery of additional coal seams elsewhere in the undivided Haloq Sandstone and Batu Kelau Formation. Investigation of the Batu Ayau Formation in the northwest parts of the concession and eastern parts of the concession, adjacent to PT Maruwai Coal may identify coal seams additional those already identified in the undivided Haloq Sandstone and Batu Kelau Formation. The Lampunut deposit appears to be generally contained within a southeast strike extension of the Batu Ayau Formation sediments in the eastern part of the BPP concession. It is reasonable to postulate that the Batu Ayau Formation seam development in the Lampunut deposit may extend to the northwest into the eastern area of the BPP concession. In the western area of the BPP project, the Batu Ayau Formation, which is present on the western flank of the regional anticline, may also be prospective for similar coal seam development. The Batu Ayau Formation in this region is known to be prospective for coking coal.

Given the size and location of the BBP concession and the limited exploration data to date, SRK is of the opinion that there is potential to discover one or more economically significant coal deposits, which may support a range of products, from a high quality export thermal, to a PCI or coking product.

PT Anugerah Alam Manuhing (AAM)
The project is largely covered by metamorphic rocks belonging to the pre-Tertiary Pinoh Metamorphics. To date, field exploration has been limited to a geological field mapping survey which was commissioned by the tenement owners during 2009. A range of lithologies were reported in the concession area, including claystone, alternating sandstone, carbonaceous claystone, granite and granodiorite, and coal. A total of eleven coal outcrops were recorded during the investigation. The recorded seam thickness ranged between 0.42 m and 4.20 m. The reported coal outcrops show a range of strikes and dips. Two strike directions are identified broadly as NE-SW and NW-SE, with dips ranging from 20º to 80º.

The reported occurrence of Kalimantan coal in a pre-Tertiary high grade metamorphic terrane is unusual. An independent field investigation is warranted to test the veracity of the reported coal occurrences in the concession area. If the coal occurrences are confirmed, a detailed field mapping investigation should be undertaken to better understand the stratigraphy and lithologies in the broader concession area.

The reported ash and specific energy of the single analysed coal sample are suggestive of a low rank, low ash thermal product. However, it is the opinion of the author that the validity of the reported assay results is questionable. Coal which occurs in a metamorphic belt would be expected to have undergone a high degree of coalification (metamorphism) resulting in an anthracite or semi-anthracite rank. The field descriptions and photographic evidence are supportive of a high rank coal. These higher coal ranks are characterised by very low volatile matter content, very high carbon content and high specific energies.

PT Anugerah Alam Katingan (AAK)
The project located in the North Barito Basin. Based on the published 250,000 scale Geology Map for the region, the surface geology concession area is represented entirely by the Late Eocene Haloq Sandstone. Initial geological mapping within the project area has identified five coal outcrops of between 1.2 m and 1.8 m thick. Based on the available data, it is not clear whether the reported outcrops are representative of one or more seams. The coals occur within the Haloq Sandstone, parts of which are known to be coal bearing (e.g.: NW Juloi).
Laboratory analysis of one of the coal samples indicates the coal is a good quality anthracite with low ash and good specific energy. The field descriptions of the coal are also indicative of a hard high rank coal. Further investigations are warranted to ascertain the distribution and number of coal seams present based on the identified outcrops and the possibility of thicker coal development in the concession.

Tanzania
Cokal has commenced drilling at its Manda Project in south west Tanzania.  Drilling will focus on understanding the stratigraphy and coal quality, targeting finalisation of a coal quality report by September 2011.  
The Manda project has multiple outcrops of highly weathered coal in the Lower Karoo Formation.  Cokal is earning a 50% interest in the Manda project by funding $500K of exploration in CY2011. 

Queensland - Inglewood Coal JV
The Farm-in Joint Venture ("Inglewood Coal JV") with Dragon Energy Ltd (Dragon) comprises Exploration Permits for Coal (EPCs) in the Surat/Clarence-Moreton and Bowen Basins in Queensland.
A total of five EPCs out of the thirteen, have now been granted and a further three EPCs (1650, 1651 and 1653) are going through Native Title process prior to being offered for grant by the DME Queensland.  EPC 1666 has also been offered for grant.  The company has signed a heritage agreement with Barada Barna Native Title group which will lead to the granting of EPC 1653 in the Bowen Basin.
Dragon has advised Cokal that it wishes to remove a total of six EPC applications (1648, 1652, 1660, 1662, 1664 and 1665) from the Inglewood Coal JV and a deed of variation has been executed.  A review of the coal potential within EPCs 1648 and 1660 undertaken by IMC has shown that significant potential exists for coal resources in the Evergreen Formation.

Mozambique
Mozambique Government owned Empresa Moçambicana de Exploração Mineira (EMEM – Mozambique Mining Exploration Company) and Cokal will jointly develop coal projects that EMEM gain title to in the emerging, vast Mozambique metallurgical coal basin.
EMEM will have 20% ownership and Cokal 80% of the JV company.
Cokal will provide funding for exploration over 3 years.
EMEM provide exploration licences
The Agreement between EMEM & Cokal provides for post exploration development through to mining and sale of coal.

Previous Company Name: Altera Resources Limited