Realm Resources (ASX: RRP) has commenced a Scoping Study on the Katingan Ria Coal Project in Indonesia with the aim of forming the basis for the decision to acquire a 75% interest in the project.
The study is for the development of an initial three million tonnes per annum open pit operation in the Southern area of the project. An acquisition decision is anticipated within the next two months.
Realm has an exclusive option to acquire all of the issued capital in Kalres Limited for US$29.6 million and the issue of 15 million performance rights, as announced on 12 April 2011.
Kalres is a party to a master agreement with PT Sinar Mulia Anugerah Aguing, under which Kalres can acquire up to a 75% interest in an Indonesian coal company, PT Katingan Ria, which holds the Katingan Ria Project.
The Katingan Ria Project is an advanced thermal coal exploration project with the potential to progress to mining within 12 months.
The project has a JORC Inferred coal resource of 40.5 (Mt) defined on the main seam in its southern area and covers 5,053 hectares.
Laboratory tests confirm sub-bituminous coal with low energy, sulphur and ash and high moisture, similar to other 4,200 (GAR) kcal/kg Indonesian coals.
A forestry exploration permit has been secured in the Northern area enabling drilling to commence in the second half of July.
Drilling in the North portion of the project will be a limited program of 6 to 10 holes, including both structural and coal quality holes. This program is scheduled be completed by the end of August 2011.
Katingan Ria is located in Central Kalimantan within the Katingan Hulu district, approximately 175 kilometres North West of the regional capital of Palangkaraya.