Indonesian Coal Limited
August 2012
1. Worldwide Mining Group
TEAM
MISSION
INDONESIAN
COAL
Strong team of Industry professionals with, proven records in project generation,
financing, mine operation and corporate governance .
Strategy:

Seek Grassroots to Brownfields level projects in the Asian Region with an
initial focus on Indonesia;

Utilise management’s mining industry experience;

Rapidly identify, evaluate and acquire suitable projects;

Add value via drill-out and BFS;

Expand project areas; and

Develop to JORC Resource/Reserve status then decide whether to mine or
sell.

The Group, thru its 50% subsidiary Indo Coal, acquired 100% of the Sokal
Coal Project in South Kalimantan in September 2011 for $3.0 M.

Historic data for 65 shallow holes was acquired.

An initial 66 holes totalling 4,500 meters drilled by Indo Coal this year.

Interim JORC Resource of 14Mt so far supports 25Mt+ originally estimated.

Funding required to finish the JORC upgrade/conversion and license renewals.
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2. Board & Management
MILAN JERKOVIC – Chairman
•
Chief Executive Officer of Straits Resources.
•
Over 25 years of experience in the mining industry involving resource evaluation, operations,
financing, acquisition, project development and general management.
•
Held positions with WMC, BHP, Nord Pacific, Hargraves, Tritton and Straits Asia.
•
Member of the Australian Institute of Mining and Metallurgy and a member of the Australasian
Institute of Company Directors.
•
B. App. Sc (Geology), Post Graduate Diploma (Mineral Economics), Post Graduate Diploma
(Mining).
RON HEEKS – Managing Director
•
24 years mining industry experience.
•
Founding partner in Exploration and Mining Consultants.
•
Previously worked for WMC, Newmont and RSG Consulting.
•
Former GM Technical for Straits Asia Indonesian Operations and Chief Technical Officer for
Adamus Resources
•
B. App. Sc (Geology).
MARK BOJANJAC – Non Exec Director
•
Over 20 years direct experience in developing resource companies.
•
A founding director of a gold company sold for A$50m.
•
Co-founded a 3.0moz gold project in China; sold for US$180M.
•
MD of a public company which successfully developed and financed a 2.4moz gold resource in
Mongolia.
•
Most recently CEO of Adamus Resources and oversaw its advancement from an early stage
exploration project through definitive feasibility studies, and managed the debt and equity
financing of its recently commissioned $100m mine which was completed within 12 months.
•
B. Com CA.
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2. Board & Management
JIM CARTER – Non Exec Director
•
16 years’ experience in resources sector, in Indonesia, Singapore & Australia specifically in M&A,
debt financing & equity raisings.
•
Key roles included CFO for SGX listed coal producer Straits Asia Resources, CFO and Company
Secretary for ASX listed Straits Resources and commercial manager for the Sebuku coal operation in
Indonesia.
•
10 years’ experience in Indonesia including involvement with the IPO of thermal coal producer
Straits Asia Resources, acquisition of the Jembayan coal operation and Sebuku northern leases as
well various associated debt and equity raisings in Asia & Australia.
•
B. Bus, CPA Post Graduate Diploma in Applied Corporate Governance.
JOHN LEWIS – Director/Co. Secretary/CFO
•
B. Bus, CA, Grad Cert. Forensic Studies (Accounting).
•
Chartered Accountant with 20 years’ post qualification experience working predominantly in
corporate reorganisation, a specialising in the mining industry for the last 10 years.
•
Previously worked in Corporate Advisory at Deloitte. John has worked on a number of mining
projects including restructuring the business for sale and managing the operations of
Croesus Resources NL (now Central Norseman Gold Mines PLC).
•
Former Director and Company Secretary of ASX Listed Dragon Mountain Gold Ltd.
PRAYOGO HARGYONO – Geology Manager
•
Exploration experience in many commodities including over 15 years of field experience in Asia.
•
Held positions with Pelsart, Borneo Gold Corporation of Canada, North Limited, Straits
Resources, Anglo American and Ivanhoe Mines.
•
As Head of Exploration for Straits Resources between 2003 -2007 he was responsible for
delineating sufficient resources to restart and maintain production at the Mt Muro Gold
Operation and for the massive expansion of the coal resources at the Sebuku Coal Operation.
Later with Anglo American, Mr Hargyono was Chief Geologist responsible for Porphyry Copper
exploration on Mindanao Island in the Philippines.
•
Geological Engineering, Gadjah Mada University, Yogyakarta.
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2. Board & Management
Indonesia
based
Chairman
MILAN JERKOVIC
Managing Director/Technical Director
RON HEEKS
Director/Co. Sec
JOHN LEWIS
Non Exec. Director
MARK BOJANJAC
Non Exec. Director
JIM CARTER
Office Manager
LISA LEWIS
Executive Assistant
Melanie Martin
Geology Manager Indonesia
Prayogo Hargyono
Gov. Liaison
SUNDERAGEN
GIS Co-Ordinator
EKO SUPRIONO
Senior Geologist
SEMUEL POPANG
KELIK PRASETYO
Geologist
GANDI NURISTIAWAN
TRI WAHYUNA
Accountant Officer
LINGKAN PAGALA
Logistic
DJONLY DATU
Secretary
LINNY KAESANG
Transport
SUTOPO
Office Assistant
AJI ROSMAYANTI
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3. Indonesian Coal - Corporate Structure
CORPORATE STRUCTURE
Indonesian Coal Ltd
(Australia)
100%
CURRENT INDONESIAN COAL
SHAREHOLDING
Issued Shares
76,000,000
Options (exc. 12.5 cents)
1,140,000
Sokal Pte Ltd
(Singapore)
100%
PT Sega Bara Persada
(Indonesia)
100%
Smaller
Shareholders
22%
WMP
50%
Institutions
28%
Sokal Project
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4. Sokal Project
SOKAL PROJECT
•
Thermal coal deposit in South Kalimantan , Indonesia.
•
Owned by Indo Coal’s 100% subsidiary, PT Sega Bara
Persada (”PT SBP”);
 a PMA coy, able to be 100% owned by nonIndonesians.
 IUP Production licence (200ha).
 IUP Exploration licence (947ha).
•
Coal seams are shallow dipping (5°-12°) near surface,
low strip-ratio and readily amenable to open cut mining.
•
Surrounded by existing producers;
 Adjacent mining of ~6Mtpa.
 Nearby mining of ~75Mtpa.
 Advanced discussions with neighbours;
 Sharing data.
 Potential acquisition/expansion.
 Potential mine-gate coal sales.
•
Excellent coal mining logistics and infrastructure.
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4. Sokal Project
8
4. Sokal Project - Sections
3D FLY-BY
PRESENTATION
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4. Sokal Project
INTERIM JORC RESOURCE
Tonnage
Coal Seams
Measured
Indicated
Seam 10
Seam 15
Seam 20
Seam 21
Seam 29
Seam 30
Seam 35
Seam 40
Seam 45
Seam 50
Seam 60
Seam 70
Seam 90
Seam 100
Seam 200
Seam 250
1,075,000
1,064,000
78,000
443,000
164,000
766,000
245,000
278,000
1,171,000
509,000
909,000
155,000
934,000
745,000
767,000
555,000
1,576,000
322,000
162,000
Seam 300
705,000
490,000
2,922,000
10,191,000
Total
Inferred
905,000
•
14Mt from 66 new holes so far
•
Best section yet to be drilled with 7 identified
seams
•
70-80 remaining holes to complete program
•
~6 weeks to complete
•
In line with our 25Mt+ estimate
905,000
14,018,000
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4. Sokal Project
COAL QUALITY
Coal quality expected to be 5,100 – 5,800 Kcal (adb).
Based on;
• Test pit sampling by Indo Coal.
• PT TIA operating directly east of the Sokal
Project.
• RKW mining directly south.
Sokal Project – Sampling
Gross Calorific Kcal/kg (adb)
Value
5,480 – 5,810
Ash
2.0 – 7.0%
Sulphur
1.3 – 3.0%
Volatile Matter (adb)
40.0 – 44.0%
Total Moisture (arb)
39.0 – 41.0%
HGI
46 - 63%
PT TIA – Coal Quality
Gross Calorific Kcal/kg (adb)
Value
5,400 – 5,600
Ash
5.0 – 7.0%
Sulphur
0.3 – 0.5%
Volatile Matter (adb)
38.0 – 40.0%
Total Moisture (arb)
34.0 – 37.0%
HGI
55%
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4. Sokal Project
EXPLORATION
POTENTIAL
BUDGET
•
Initial exploration targets on Indo Coal tenements;
 7-10Mt from the IUP Production (Mining Licence).
 25- 50Mt from the IUP Exploration Licence.
•
Shallow dipping seams of 5° to 12°;
•
Untested shallow mining of undrilled seam(s) on southern boundary.
•
Potential deeper seam of up to 25m thickness as mined directly to the east.
2012/2013 Use of Funds
A$m
Drilling , Permitting , BFS
1.5**
Other Exploration
0.25
Working Capital
0.25
Total
2.0
**Will bring SOKAL project to Decision to Mine Status.
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4. Sokal Project – Infrastructure
EXISTING
INFRASTRUCTURE
PROPOSED
INFRASTRUCTURE
SOLUTION
•
Multiple haul road options on tenure.
•
3 multi-user port facilities within 40km.
•
Experienced mining contractors operating nearby.
•
Well serviced road and air network.
•
Multi-user wash plants located nearby if required.
•
Negotiating use of existing haul roads and port facilities.
•
Contract earthmoving, haulage and port facilities.
•
Possible mine-gate sale to neighbouring operators.
(discussions commenced)
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5. Sokal Project - Development Plan
PAST
•
9 MONTHS
Purchased Sokal;
 Completed due diligence;
 Now 100% owned by PMA company;
 Acquired & analysed historical drilling data.
•
Opened discussions to acquire tenure to north and south;
•
Commenced drilling in March 2012;
•
Reviewed 150+ potential new coal projects;
 Currently undertaking due diligence to acquire further
coal projects in Indonesia.
•
Significant progress made on permitting;
•
Resource Modelling up to date;
•
Initial Engineering cost study completed;
•
EPA approvals progressing; and
•
Lodged all license renewal documents.
Indonesian Management Team
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5. Sokal Project - Development Plan
EXPECTED
PARAMETERS
Parameters
Value
Initial Production (1H 2013)
0.75Mtpa
Expanded Production (2015)
1.5Mtpa
Mine Life
>5 years
Yield
90%
Expected Strip Ratio
2:1 initially (LOM of 6:1)
Estimated Minegate Costs (LOM)
~US$23-30/t
Estimated FOB Costs (LOM)
~US$30-40/t
Capex
STATUS
~US$12m
•
Initial work consistent with Scoping Study parameters.
•
Independent consultants appointed for BFS;
 Interim Resources up to date.
 Reserve calculation on drill completion.
 Engineering Studies and costing analysis commenced.
 Mine scheduling work underway.
•
Opex estimate verification commenced and ongoing.
•
Infrastructure use discussions commenced.
•
Decision to mine or trade sale
4Q 2012
•
BFS completion expected
4Q 2012
•
Funding and off-take arrangements if req.
1Q 2013
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5. Sokal Project - Development Plan
INDICATIVE TIMING
2012
APR
MAY
JUN
JUL
AUG
SEP
OCT
NOV
DEC
EXPLORATION PERMITTING
DRILLING
• WIDE SPACING
• INFILL
RESOURCE CALCULATION
MINE COSTING
RESOURCE CALCULATION / MINE DESIGN
MINE PERMITTING
• LEGAL
• ENVIRONMENTAL
BANKABLE FEASIBILITY STUDY
DECISION TO MINE OR TRADE SALE
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6. Peleng Island Project
•
Term sheet signed to undertake 6 month legal and
technical DD;
•
Takeover for cash and Royalty per tonne;
•
Approx. 20,000 hectares;
•
Existing samples of 6000+ CV coal with low moisture;
•
Very poorly explored;
 Identified by Mines Department mapping in 1998;
 Little serious exploration since.
•
No systematic exploration undertaken;
•
Remote location east of Sulawesi;
 Away from overpriced areas of Kalimantan.
•
Licences border coastline;
 Excellent logistics for mining and shipping.
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7. Indonesia
WHY
INDONESIA?
MINING
REGIME
•
Large known coal resources – one of the world’s
most productive.
•
Quality coal with a proven history.
•
Worlds largest exporter of thermal coal.
•
Proximal multi-user facilities for coal washing and
handling.
•
Board & management expertise in Indonesian coal
projects.
•
Experienced technical team based in Indonesia.
•
Experienced mine contractors and low cost
workforce.
•
Mining Law now allows 100% project ownership.
•
“White Paper”: proposal that Indonesian partners
buy 51% within 10 years at “fair market value”;
 No changes have been implemented to date
and may not be.
•
Up to 7% Government Royalty.
•
25% Tax Rate (maximum).
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8. Reasons To Invest

100% owned tenure.

Market quality thermal coal.

Infrastructure proximity.

Low exploration cost.

Experienced management team.

Immediate value-add from drilling and BFS.

Opportunity to Mine or Sell.

Potential adjoining and regional expansion.
IMMEDIATE TERM SHAREHOLDER VALUE
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Appendix
SEBUKU CASE STUDY
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Sebuku Case Study
1996
1998
2006
2011
•
Straits purchases 80% for $26 million.
•
Resource of 20Mt, Reserve of 13Mt.
•
Mine commissioned.
•
1.3Mtpa annual production.
•
Straits Asia IPO at S$0.72/share valuing Sebuku at S$750m.
•
Resource increased to 240Mt.
•
Further acquisition;
•
Increasing production from 1.5Mtpa to 10Mtpa over 3 years.
•
Straits Asia current market capitalisation of S$3.4 billion.
•
Share price of S$2.99.
•
Annual production increasing to 20Mtpa by 2014.
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Contacts
INDONESIAN COAL LIMITED
www.worldwideminingprojects.com.au
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