(MENAFN - ProactiveInvestors - Australia) Indus Coal (ASX:ICZ) will look to raise 6.5 million to acquire three thermal coal bearing concessions in Sumatra, Indonesia.
A total of 3,500,000 is being raised by way of an equity issue and 3,000,000 is being raised by way of a placement of secured convertible bonds.
This will initiall acquire 38% shareholding in the two companies that own the three Jambi Coal Projects (Blocks 7, 8 and 9).
Stage 2 involves the purchase of a further 38% shareholding in exchange for US9,500,000.
Interestingly, the concessions of 14,394 hectares are located in a well-known thermal coal producing region of Jambi Province in Sumatra.
Numerous operating, profitable coal mines are located in close proximity.
As significantly, strong existing local infrastructure (roads, jetties and barging contractors) exists with available capacity which supports nearby coal mines which each produce 1-2mtpa.
Nearby coal mines have been brought into production with low CAPEX of only US5m to produce 1-2mtpa of coal per mine.
Stripping ratios in these nearby coal mines are between 1:1 and 1:6.
Salva Resources Pty Ltd has an coal Exploration Target on Block 9 based on historical drilling (12 holes) and 15 coal outcrops at surface of between 70,000,000 to 75,000,000 tonnes of thermal coal over a strike length of 4.5km x 1.5km wide.