Cloudified Holdings Limited Regulatory News (CHL)

15 Jun 2007 12:00

Churchill Mining plc15 June 2007 15 June 2007 CHURCHILL MINING PLC ("Churchill" or "the Company") Coal Off-take Heads Of Agreement Signed With Indonesian Power Utility PT Ridlatama Bangun Mandiri (PT RBM) Highlights: • PT RBM to build two power stations 15 kilometres from Churchill's East Kutai coal project in Kalimantan. • Churchill signs coal off-take HOA with PT RBM for 30 years. • Churchill to deliver coal at an initial rate of 840,000 tonnes per annum starting 2010. Churchill Mining Plc (AIM: CHL) has signed a Heads of Agreement ("HOA") withIndonesian power utility company PT Ridlatama Bangun Mandiri (PT RBM) to supplythermal coal for 30 years to feed two 30 megawatt power stations that PT RBM isbuilding in Kalimantan, Indonesia. PT RBM is an independent power producer owned 55% by PT Indonesia Power (awholly owned subsidiary of Indonesia's state owned electricity utility, PLN)with the remainder owned by private investors. PT RBM was recently grantedlicence approval to build the power stations and construction will start at thebeginning of 2008. The plants are expected to be on-stream by mid-2010. These first-stage plants will be built at a cost of approximately US$60 millionat Muara-Marah, a provincial town located approximately 15 kilometres east ofChurchill's East Kutai coal discovery. The location for the plants was chosenbecause of East Kutai's rapidly expanding population base and its growing energyneeds. Under the HOA, which will convert into a final coal-purchase agreement once aJORC compliant mining reserve of a minimum of 30 million tonnes has beendefined, Churchill will supply approximately 840,000 tonnes of coal per annumfor 30 years based upon a 5% discount to the prevailing market price. Testwork on coal discovered by Churchill at its East Kutai project to date hasfound it to have an average calorific value of 5260 kilocalories per kilogram.Investigations made by Churchill show that similar type coals are trading forapproximately US$28 per tonne. Churchill Mining's joint managing director, Paul Mazak, said the HOA was a majorstep forward in the Company's plan to secure early-stage cash flow. "We areviewing the relationship with PT Ridlatama Bangun Mandari as a first step. Weare aware that they are looking to building other power stations in Kalimantan,certainly much bigger than these first two plants, and discussions are ongoingon how Churchill can be involved." ENDS Enquiries: Churchill Mining Plc Blue Oar Securities Plc Parkgreen CommunicationsPaul Mazak/James Hamilton Olly Cairns Justine Howarth/Brendan McNamara+61 (0) 8 9388 0377 +44 (0) 20 7448 4400 +44 (0) 20 7851 7480 paul.mazak@churchillmining.comjames.hamilton@churchillmining.com Notes to editors Churchill Mining Plc listed on AIM in April 2005. Its principle operations arethe South Woodie Woodie manganese project in Australia and the Sendawar and EastKutai coal projects in Indonesia. South Woodie Woodie The South Woodie Woodie project covers approximately 490 square kilometres inthe East Pilbara region of Western Australia. Owned via Churchill Mining'swholly-owned subsidiary, Planet Mining Pty Ltd, the project sits approximately400km southeast of Port Hedland in the highly prospective Pilbara manganeseprovince. Churchill owns the project 100%. To date much of the project areahas never been explored due to the presence of surface cover. Churchill hasconducted a versatile time-domain electromagnetic (VTEM) geophysics survey todefine targets for drilling. VTEM is a leading heli-borne technology that candetect conductive mineralisation and related structures to depths of 400m belowsurface. Sendawar The Sendawar project in Kalimantan, Indonesia, covers more than 1,000 squarekilometres of prospective ground and lies in close proximity to two operatingopen-cut mines: Thai miner Banpu's newly commissioned Trubaindo operation, whichwill shortly be producing at a rate of approximately six million tonnes perannum (tpa); and the privately-owned Gunung Bayan mine which has been operatingsince 1998 and produces approximately 3.4 million tpa. Coal from these mines istransported by barge via the Mahakam River to the port of Samarinda. TheSendawar project is located approximately 50km from the Mahakam River. East Kutai Churchill announced on 15 February 2007 that it had signed an ExclusivityAgreement with PT Techno Coal Utama to enable it to conduct due diligence workon the thermal coal project. In May 2007 Churchill announced a sales agreementwhich will see it purchase a 75% interest in the Project. This information is provided by RNS The company news service from the London Stock Exchange