www.churchillmining.com
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 makes Caesars Report’s top 5 mining stocks for 2010 list
Caesars Report unveiled its top 25 mining stocks for the year 2010, ranking Indonesia operating coal miner Churchill Mining (AIM: CHL) second due to its exposure to the fast growing Chinese and Indian markets that are characterised by a high demand for raw materials and “huge deposit,” as the company currently has 700 Mt (million tones) in reserves and another 2 billion in resources.
The company’s growth plan quickly accelerated in 2007-2008 with the discovery of a very large thermal coal deposit at the East Kutai project, in which Churchill has a 75% interest. To date more than 3.18 billion tones of coal has been drilled to JORC standard with the company focusing its drilling effort to turn the resource into a mining reserve and scope out both short-term and long-term production scenarios.
Other bullish points in the report included the large exploration upside as just 30% of Churchill’s land holding in East Kutai has been drilled along with a short payback period, low cash cost backed by Pala investments, an expected increase in coal prices and the project’s proximity to consumers in Indonesia, India and China, where 1,100 new coal-fired power stations are currently being built.
Also, three parties are currently interested in buying the company with another four expressing interest in joint venturing (JV) it, which could potentially cause a bidding war or a buy-out, JV or offtake agreement announcement.
The only bearish point was the unavailability of a capital expenditure estimate, which is, however, expected to be released at the end of the current month.
The stock’s current price stands at 100 pence, which the Caesars Report called a “ridiculously strong undervaluation.”
A recently completed feasibility study for the East Kutai project confirmed a preferred 20 million tonne per annum production rate. The company anticipates project construction work to start in 2010 and take two years to complete.
