The Perth-based company, formed in September last year, will offer up to 25 million shares at 20c each to raise up to $A5 million.
Chairman Allan Ryan said in the company’s prospectus that on raising the funds it would “proceed immediately with the exploitation of the exciting Kilisuci and Palapa projects and exploration of the Abadi project”
At the Kilisuci project, located in South Sumatra, Coal Fe Resources has an exploitation licence over 663 hectares of mining land and an exploration licence over 1337ha of adjoining land. The project has a JORC standard inferred resource of 25 million tonnes and a measured resource of 1.9Mt.
The company's targeted objective is to prove up an opencut mineable deposit at a waste-to-coal strip ratio of 8:1 or better.
At Coal Fe Resources’ PSA coal project in East Kalimantan, the company holds an exploration licence over 1017ha and has an estimated inferred resource of 2.122 million tonnes.
The company holds an exploration licence over 100ha at its third project – Palapa.
Indonesia has approximately 60.5 billion tonnes of coal reserves, of which 7 billion tonnes are considered proven. Approximately 39.2% of these proven reserves are located in Sumatra, primarily in the south, and 60.8% in Kalimantan, the company said.
“The board believes that as a consequence of the increase in freight rates in 2006, which doubled in comparison to 2005, coal exports from Indonesia will dominate the market in East Asia,” Ryan said.
“In today’s coal trade, a substantial factor that influences the market is the ever increasing strong demand from China and India. Over the past 24 months, the price of steam coal has remained at high and stable levels which seems to be closely related with the price of oil and commodities in general,” the company stated in its prospectus.
“Coal Fe Resources intends to utilise any uncommitted funds from the float to engage in coal trading to take advantage of this perceived opportunity.”
As well as acquiring the mining rights to coal projects in Indonesia, the company is also willing to consider acquisitions of similar projects in Australia and elsewhere.
