Pan Asia Corporation (ASX: PZC) has received a major 115% JORC Resource boost to 114.6 million tonnes at the Transcoal Minergy (NYSE:TCM) Coal Project in Indonesia - which importantly has 62% of the resource in the higher confidence categories of Measured and Indicated.
The size of the upgrade is better than expected and underpins the company's belief that the project has potential to be an initial open pit mine and bring project cash flows forward while generating a preferred entry for future underground mining.
The interim upgraded JORC Resource calculation was undertaken by coal industry group Kopex Mining Contractors (part of the KOPEX Group).
After completing 18 boreholes from the present phase of drilling and a total of 35 boreholes drilled to date, the resources now comprises 35.6 million tonnes in the high confidence Measured category, with 35.1 million tonnes indicated and 43.9 million tonnes Inferred.
Alan Hopkins, Pan Asia's chief executive officer, said “while drilling is ongoing, the results to date have all but confirmed that the planned scale of operations is well supported by the proven resource.
"All other testwork is well advanced and is feeding into the full Feasibility Study, which is underway and scheduled for release in first quarter 2012.”
With only a third of the concession drilled, further drill results are expected in mid November which are likely to result in another resource upgrade.
The TCM Coal Project has a high calorific value of about 6500 + kcal/kg adb. The coal quality model will be further updated when all the coal quality results are in for the current drill program. Geo tech results are expected shortly and should provide momentum for Pan Asia to negotiate commercial arrangements for its coal product with Asian customers.
Washability tests and subsequent analysis of the results have been undertaken on a 500 tonne bulk sample to develop a conceptual Coal Handling and Preparation Plant design. A follow up release is expected in two weeks to confirm the coal's quality.
Further testwork and analysis of all quality data will lead to a specification of a saleable product, the results of this are expected later this month targeting a TS of ~1.0 with good yield.
Pan Asia has a target scale of operation of 1.5 to 2 million tonnes annually for TCM, for a mine life of 15 to 20 years.