(MENAFN - ProactiveInvestors - Australia) Pan Asia Corporation (ASX: PZC) has had a major boost in JORC mineable resource seams at the company's (75% interest) TCM High CV Coal Project in South Kalimantan, Indonesia, following a resource upgrade.
The JORC Resource for all seams increased to 177 million tonnes (Measured, Indicated and Inferred) from 128 million tonnes (around 6200 GAR kcal/kg).
Importantly on the commercially important mineable seams, the JORC Resource increased over 70% to 129 million tonnes. The calculation was completed by European coal industry group Kopex Mining Contractors.
Alan Hopkins, chief executive officer, commented: "This very large increase in tonnes allows us to target a mine life of more than 30 years and significantly expands the resource base for the planned updated feasibility study.
"Combined with the now expected higher mining recoveries and lower capex, we have the chance to really boost the NPV for this high CV project."
Pan Asia's hat trick of MoA's with Chinese groups
Recently Pan Asia executed MoA's with three Chinese groups, namely:
- CCTEG China Coal Technology Engineering Group ("BHEC " CCTEG") to update the mine plan targeting significantly higher recoveries;
- Huamei Group Company Ltd ("Huamei") for the undertaking of development and contract mining operations; and
- Zhongding International Engineering Group ("ZIEC") for participating in the development and undertaking of contract mining operations.
Pan Asia plans to execute a detailed feasibility study update with BHEC - CCTEG once the scope of works and all commercial terms are finalised. This study should take around 4 months to then complete.
Internal financial modelling of the expected outcome projects very significantly enhanced project values even at current coal prices.
Pan Asia recently provided the TCM project base case feasibility study and raw data to China's leading coal mining design and engineering Institute (BHEC " CCTEG) for peer review.
They advised that with their extensive experience in ground conditions similar to those at TCM, a different mining approach should result in coal recoveries significantly higher than those forecast in the current base case study scenario.
The powerful combination of more tonnes, higher recoveries and lower capex will deliver a substantial rerating for the project - even with the current lower coal prices.
Proactive Investors considers that Pan Asia is now well placed to ride the share price re-rating wave based on these factors.
If Pan Asia can also de-risk the project through avenues such as; development partnership / offtake agreements with quality, life of mine partners; then Proactive Investors would envisage that the company's share price would be re-rated higher on these milestone announcements over the short to medium term, with the current 0.07 share price providing investors with an opportunity which may not be on offer for long.