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Churchill Mining outlines key steps in arbitration over East Kutai

Churchill Mining outlines key steps in arbitration over East Kutai

---Update with share price and broker comment---

Churchill Mining (LON:CHL) updated investors on its ongoing claim against the Republic of Indonesia through international arbitration, and repeated that this is currently the firm's main focus.

In an interim results statement, the firm outlined the key steps, past and ahead, of the case regarding the US$1.8 billion East Kutai coal mine development project in Indonesia.

In May last year, the firm began arbitration against the Republic of Indonesia (ROI) at the International Centre for Settlement of Investment Disputes (ICSID) in Washington.

Notably, Churchill's Australian subsidiary Planet Mining Pty, which via its 5% stake in PT Indonesia Coal Development also holds an interest in the East Kutai Coal Project, has now also filed for arbitration at ICSID.

The Churchill and Planet arbitrations have now been consolidated into a single proceeding and will be dealt with and heard together, the firm pointed out today.

On March 13 this year, Churchill and Planet filed their witness statements as well as initial expert evidence at ICSID.

ROI is now required to file its objections to jurisdiction by April 8 this year and Churchill/Planet will then file their response to that by April 30.

Also ahead is a hearing in Singapore beginning May 13 to address a challenge by the ROI that the arbitration tribunal does not have the jurisdiction to hear the claim at all.

"Considerable efforts have been undertaken to reduce other administration and corporate overheads," Churchill said, adding that other than admin costs, arbitrations against the ROI are the only draw on Churchill's cash resources.

For the six months to December 31 last year, Churchill posted a loss before tax of US$4.5mln, compared to a loss of US$ 6.4mln in the same period a year earlier.

House broker Northland noted that the international arbitration was now "entering a critical phase".

"If Churchill receives a favourable judgement on jurisdiction then the potential for recovering funds for shareholders should improve," said analyst Andrew McGeary.

"Progress under arbitration looks positive so far but as with all such legal disputes the ultimate outcome remains uncertain."

Shares dipped 2.38% to 10.25p.

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