01/04/2008
AIM-quoted Churchill Mining looks set to prosper after continuing rises in the price of coal, according to broker Gall & Eke. Churchill targets quality coal projects in Australia and Southern Asia and is currently focusing on high-quality thermal coal deposits in Indonesia, where there is well-established infrastructure.
Churchill’s original project in Sendawar covers a holding of land nearly 800 sq km in size. Although accessible coal was not found there in economic quantities, it is thought there is sufficient methane that could be mined as an alternative. If so, a joint operations company will be created by Churchill and Indonesian partner PT Ridlatama Mining Utama that could later become a production-sharing contract.
A strategic subsidiary
The company owns 40.1 per cent of Australia-listed Spitfire Resources. Spitfire has an 80 per cent interest in the South Woodie Woodie project (SWW), a 490 sq km manganese project in Western Australia. Based on its location near to Consolidated Minerals’ Woodie Woodie manganese mine and geographical surveys, SWW looks promising.
In 2007, Churchill acquired a 75 per cent beneficial interest in the East Kutai coal project in Kalimantan via its Indonesian subsidiary. Coal in this 575 sq km area of land shows good commercial-quality ratings, auguring well for profits.
At 62p, Churchill is capitalised at £40.47 million and looks poised for steady growth based on thermal coal prices that have risen to well over US$100 per tonne (compared to US$25 a tonne in 2003). Indonesia’s emergence as 2007’s leading exporter of the substance also bodes well.
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