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Oracle Coalfields extends exploration license over Block VI coal project

Last updated: 08:37 04 Nov 2010 GMT, First published: 09:37 04 Nov 2010 GMT

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Oracle Coalfields (PLUS:ORCP) has secured an extension of its  exploration licence at Block VI of the Thar coalfield in Pakistan until 25 November 2011, enabling it to complete the feasibility study.

The company also said it intends to announce an update on ongoing operations in the field shortly.

Block VI Thar has a 1.4 billion tonnes JORC compliant measured resource and proved reserves of 371 million tonnes.

The original exploration licence for coal over an area of 66.1 square kilometres (sq km) was granted to Oracle’s subsidiary Sindh Carbon Energy Limited in November 2007 for a period of three years.

“The extension of the licence demonstrates the continued governmental support for the development of the Thar Coalfield and will allow us to complete our work program for the bankable Feasibility Study,” said chief executive of Oracle Coalfields Shahrukh Khan.

Oracle’s bankable feasibility study (BFS) is investigating plans to start a 3.5 million tonne per annum (Mtpa) mining operation, with initial production commencing in 2012.

The company sees 2.5 million tonnes per annum (Mtpa) being directed to a power plant and 1 Mtpa being sold to the local cement industry.

Edison Investment Research has attributed a 0.43 pence per tonne enterprise value, highlighting the two deals signed at the turn of the year, December’s memorandum of understanding (MoU) with the Karachi Electric Supply Company (KESC) and January’s MoU with Lucky Cement.

The company also owns the Indus East coal project in Pakistan where a pre-feasibility study has confirmed a JORC-compliant inferred resource of 365 million tonnes.

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