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Oracle Coalfields is a UK based company with its primary coal projects in Pakistan. It will in time evaluate global opportunities for investment and strategic partnership for coal mining and production.
Oracle Coalfields in talks with mining contractor for Thar project in PakistanApril 24 2012, 7:35am
Oracle Coalfields (LON:ORCP) said it is in talks with an international mining contractor for mine development and operation for its Thar Coalfield project in Pakistan’s Sindh Province.
In a statement accompanying results for the full year to end-December 2011, chief executive Shahrukh Khan told investors: "Oracle has all the building blocks in place to achieve its target of delivering Pakistan's first large-scale mine, while also producing long-term sustainable returns for our shareholders.”
The group produced a positive feasibility study in February and was issued a mining lease earlier this month.
The financial results for the reflect a year in which the company has made significant progress, including admission to the AIM market of the London Stock Exchange in April 2011, the strengthening of management and the board and the submission of the application for a mining lease.
Oracle also raised £3 million before expenses in an oversubscribed placing of 30 million new shares. These funds are being used as working capital for the coal project in Block VI of the Thar Coalfield.
The company reported a wider operating loss of £953,585, compared with a loss of £222,674 in 2010, mainly due to higher administrative expenses and the costs incurred for the AIM listing.
At the end of the year, the group had cash and cash equivalents of £1.60 million, £1.51 million a year earlier, sufficient to cover its immediate working capital requirements.
However, additional funds will be needed for working capital later this year to develop the Block VI coal mine. Oracle is therefore considering options and strategies to raise the necessary debt and equity.
The mining lease for Block VI extends for 30 years and may be renewed for a further three decades. The coalfield lies 380 kilometres from Karachi and covers a total area of 9,100 square kilometres.
Thar lies close to good infrastructure, with ongoing development of a road and power network in the region.
The feasibility study on Thar underlined its “technical and economic viability”. Total capital expenditure for an open-cast development is estimated at US$610 million, including US$224 million for mining equipment.
This will allow the company to produce five million wet tonnes of lignite coal per year. However the plan initially at least is to mine around 1 million tonnes a year from 2013.
Total cash costs are put at US$42.21 per wet tonne, and the life of the mine is estimated at 23 years.
The feasibility study said there is a JORC-defined 529 million wet tonnes in the mining area. The product has been confirmed as suitable for power generation.
Oracle is working on a bankable feasibility study as it seeks the funding required for the project and Citigroup Global Markets has been brought on board to find a “comprehensive funding solution”.