Cokal is on track to secure the funding it requires to develop the Bumi Barito Mineral (BBM) coking coal project in Indonesia.
The Sydney-based company has signed a term sheet with Asian minerals development company, Domain International Holdings, for at least $67 million in financing for the development.
Domain has been in discussions with Cokal for 12 months and has conducted due diligence on the Indonesian project.
Cokal expects the agreement to provide an attractive and strategic funding solution that will transform the company into an international coking coal producer. The ASX-listed coal company plans to develop BBM into a 2Mt/y operation.
Domenic Martino, Cokal chairman, said the company had developed a much sort after coal project into the production-ready stage.
He added Cokal “is highly motivated to commence production in order to realise the inherent strategic and financial value of the asset.”
“Coal production from BBM will generate attractive profits for Cokal and returns for its shareholders.”
Under the agreement, Domain will provide Cokal with a debt and equity financing package that will fully fund development of the BBM project.
BBM, located in Central Province on Indonesia’s Kalimantan Island, covers around 1500 hectares. Cokal has secured all mining permits and approvals required for the project.