Padang Resources (formerly Palace Resources) has received a legal due diligence report on the permit holder of the Paser coal project in East Kalimantan.
The company signed a Memorandum of Understanding with the shareholders of Paser to acquire a 70% stake in the project, which is currently under acquisition from PT Gunung Mentari Mining. The MoU terms include a payment of 125 million shares, reimbursement of development expenses and US$600,000 cash.
Padang says the report validates the permit holder has been registered at Indonesia’s Law and Human Rights ministry and has obtained a mining licence for the operation and production, hauling, sale and refining of coal.
The 43 hectare permit area is near the village of Petangis in the Batu Engau district, within the Tanjung formation. The prospect area is about 100km southwest from Balikpapan. Good quality haul roads exist in and around the concession area with jetty locations within a short distance to a deep water harbor with an existing operational port nearby.
Padang has engaged an independent geologist and is mobilizing a reconnaissance and drilling team to validate the economic viability of recommencing mining as well as proving up the project’s resource to a JORC-compliant standard. The company believes Paser has the potential to resume production subject to a positive mining study.
Padang is aggressively exploring and developing resources in the South East Asia with a focus on Indonesia.