CKA going forward, page-56

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07/03/18

19:07

Post #: 31600144
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Originally posted by twmochi ↑

Mining rate is still below nominal capacity. This is due to a combination of poor mine planning and the low river levels in the preceding 6-8 weeks. No stockpile capacity left at mine site or the ISP so they have been removing overburden instead - really not ideal to be doing this but this is what happens when you are a recently commissioned operation; people make mistakes, and fail to adequately plan for an almost 2 month low river level period where barging was not feasible.. The upside to this is that they won't need to be removing as much overburden and waste in the coming quarter given this has already been done to expose the seams.

As has been said previously, once funding is received the dry season can be planned around easily by having sufficient stockpile pads at the ISP. My understanding is that steel mills need security of supply with iron ore products (given the importance of maintaining lump to DSO fines to pellet ratio in pig iron production) and less so with coke blends given there are other similar spec coals to that of CKA. So current parties in discussion are OK with having some uncertainty around the river levels, particularly the volatility outside of the dry months. Not having the Cokal PCI product or having less volume in certain months is not expected to impact furnace productivity so will not be a hurdle to current discussions (understand there are some people here concerned about this).

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Twmochi, BB thanks for the updates.

With current coking coal prices holding firm and Asian steel demand rising 3% year upon year, I'm of the belief a deal will be done soon.

Any discussion about using a different type of barge (shallow draft) ie Mississippi style type?
Then again the problem arises of passing under the various bridges when the Barito river is in flood.

The ideal solution would be to build a road to the ISP, but then so would a cornerstone investor.

Catch 22, can't have one without the other.

Cheers lute

CKA Price at posting: 4.4¢ Sentiment: Buy Disclosure: Held
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