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Additional Information

Market:	AIM
Sector:	Coal
EPIC:	CHL
Latest Price:	13.00 (0.00%)
52-week High:	57.25
52-week Low:	9.00
Market Cap:	15.93M

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Churchill Mining Full Churchill Mining profile here

Churchill Mining PLC is an AIM listed (CHL) mining company with a significant thermal coal development project located in the East Kutai Regency of Kalimantan, Indonesia, where to date more than 2.73 billion tonnes of coal resource has been defined to JORC standard. The project feasibility study has been completed, indicating an economic and desirable project and the study forms the platform for the next stage in the development of the Project. In addition to the East Kutai Coal Project, Churchill has interests in the Sendawar Coal Bed Methane Project in East Kalimantan, Indonesia and a strategic holding in Spitfire Resources, who are developing the South Woodie Woodie Manganese Project in Western Australia.

Churchill Mining managing costs well as legal fight continues, says Northland

Friday, October 28, 2011 by Jamie Ashcroft

Churchill Mining (LON:CHL) is managing its legal costs well and it is well capitalised to continue pressing its legal case in Indonesia, according to Northland Capital analyst Andrew McGeary.

In yesterday’s financial results, for the twelve months ended June 30, the group revealed that it has now made a full write down of the stalled East Kutai coal project.

Chairman David Quinlivan expressed the group’s surprise at the negative ruling from the regional authorities, at a tribunal in March, which has brought the development of the world class East Kutai coal project (EKCP) to a standstill.

The regional tribunal Churchill sought to overturn a move by a local authority to revoke the licences which host the East Kutai project. The company believes the negative ruling was fatally flawed, because “it did not properly address (and in some cases did not address at all) a number of key issues raised during the hearing”.

A subsequent appeal to the Administrative High Court in Jakarta was dismissed. Churchill is now pursuing an appeal to the Indonesian Supreme Court, and it says it will continue to pursue all legal avenues available.

In today’s results Quinlivan told investors that Churchill will “continue to vigorously pursue its claim for the full reinstatement of its rights in relation to the EKCP”.

“If the company does not receive a satisfactory outcome it may ultimately pursue further claims via the international courts under bilateral investment treaties,” McGeary said in a note to clients.

“(Churchill) continues to lobby at high levels backed by its new major Indonesian shareholders and board members, Mr Rachmat Gobel and Ms Fara Luwia.”

But according to McGeary the key takeaway fact from yesterday’s results is the fact that Churchill still has a US$18 million fighting fund in the bank.

“Going forward the company is well capitalised to continue pressing its legal case,” he added.

“At present cash burn is predominantly of a legal nature but the company has managed these costs well, utilising its high level contacts and legal teams cost effectively.”

The analyst maintains a cautious view on the stock because of the ‘very uncertain’ legal backdrop in Indonesia.

“While we point to strong cash backing and significant inherent value of the underlying assets if title can be effectively upheld, we maintain our caution given the uncertain outcome and timeline of legal proceedings underway,” McGeary surmised.

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