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 shares soar 40 per cent after new local partners show their faith in the company
Shares in Churchill Mining (LON:CHL) shot up more than 40 per cent in opening deals after it was revealed that the group is bringing on board two Indonesian partners who are subscribing for £7.7 million-worth of shares.
The cash will see the company through a tricky period of its development as it fights a legal rearguard over its East Kutai coal project in the East Kalimantan region of the country.
Indeed analysts believe the two influential business people Churchill has brought on board could provide some much needed local expertise.
Earlier the company revealed that Rachmat Gobel and Fara Luwia are acquiring 19.3 million shares at 40 pence each – a 60 per cent premium to the 20-day average price of the stock. The pair will own 16.5 per cent of the enlarged company.
Gobel is the head of Gobel International, which has a partnership with Japan’s Matsushita Corporation and is the local representative of Qatar Telecom, while businesswoman Luwia is currently developing one of the largest rice mills in the country in partnership with a Swiss commodity trader.
Chairman David Quinlivan said: "Churchill welcomes Mr Gobel and Ms Luwia as both shareholders and strategic partners.
"They have a significant on-ground presence in Indonesia and Churchill believes that they will provide the local expertise and experience necessary to advance the East Kutai Coal Project through to its production phase in the most expeditious manner possible."
Churchill is currently appealing an attempt by the regional authorities in Indonesia to cancel the licences covering East Kutai, a potentially world class coal mine with a 961 million tonne JORC mining reserve and 2.73 billion tonnes of JORC resources.
The sheer scale of the project is reflected by the US$1.2 billion direct capital costs to build the mine.
Once operational the proposed open pit would produce 30 million tonnes of high grade thermal coal each year, for an initial 25-year life. It would generate cashflow of US$500 million each year.
Gobel added: "I am looking forward to working with Churchill to advance the East Kutai Coal Project into development.
“I believe that this project will be a significant contributor to East Kalimantan's economy and bring substantial benefits to the region and Indonesia as a whole."
At 10.50 am the shares were trading up 16.25 pence at 54 pence.
David Johnson of Broker Matrix told clients this morning: “With the East Kutai Coal Project currently bogged down in the legal process, the placing provides some additional financial fire-power but also some much needed local expertise.”
