ASX Announcement

4 September 2013

ASX: ICZ

Maiden Resource - Block 9

For personal use only

Corporate Directory
Scott Douglas
Executive Chairman
John Kenny
Executive Director
Vinay Hariani
Executive Director
Ashish Patel
Executive Director
Campbell Baird
Executive Director
Mark Clements
Company Secretary
Contact Details
Level 3
18 Richardson Street
West Perth WA 6005
PO Box 875
West Perth WA 6872
Telephone: 1300 532 786
Facsimile: 1300 391 738
www.induscoal.com.au

ADDRESS
Level 3, 18 Richardson Street
West Perth, WA, 6005

Highlights
The maiden Coal Resource Estimation arising from the 9,000m HQ
drilling program at Block 9 being conducted by 8 drilling rigs over a
strike distance of 6 kilometres in length has been completed on the
major coal seams at Block 9.
94,094,218 tonnes (JORC Indicated + JORC Inferred) across all coal
seams is the maiden JORC estimation for Block 9. On average the coal
has a 5,300 GCV (adb).
The Coal Resource is based on diamond drill core of HQ size and
interpreted from geological cross sections using digitized outlines and
wire-frames on VULCAN software. The Coal Resource for Block 9 has
been estimated after due process and adherence to standard resource
estimation procedures by a Competent Person as detailed by the
2004 edition of the Australasian Code for Reporting of Exploration
Results, Mineral Resources and Ore Reserves (JORC Code). An
explanation of the method and procedures used for resource
estimation is found in the Summary Table of Resource Criteria in
Appendix A (at the end of this ASX announcement). The resource
estimation was completed by Geologica Pty Ltd (Geologica) in
conjunction with Global Mining Services Pty Ltd (GMS).
Assays returned to date for Coal Seam A indicate consistent GCV values
in the range 5,000 to 5,400Kcal/kg and this coal seam is classified
within both Indicated and Inferred Coal Resource categories. Coal
Seam A has been confirmed from 28 core holes over a strike distance of
6.0 kilometres from surface to a vertical depth of 120 metres and from
400m to 600m down dip from outcrop. The average intersected
thickness of Coal Seam A is 10.8 metres with large areas in the centre of
the deposit outcropping or being less than 10 metres below the
surface. This area has been identified as the key starting area of the
planned pit operation.
Coal Seams X, B, B1-B5 showed a broader range of GCV values and
more variability and although their thicknesses were consistent these
coal seams have been classified entirely within the Inferred Resource
category.
The 8 drilling rigs on Block 9 continue with the 9,000 metre HQ coring
program. This ongoing drilling program will define further and extend
the Indicated Resource Category. It is also designed to upgrade a
section of the current Indicated Resource to Measured Category so that
mining parameters can be applied for an initial open pit. In addition
further resource estimations will be completed on the minor seams
when more assay data is to hand.

PHONE
T: 1300 532 786
F: 1300 391 738

WEB
info@induscoal.com.au
www.induscoal.com.au

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ASX Announcement
4 September 2013
ASX: ICZ

For personal use only

The Board of Indus Coal Limited (Indus or the Company) is pleased to release the maiden Coal
Resource Estimation arising from the 9,000m HQ drilling program at Block 9 being conducted by 8
drilling rigs over a strike distance of 6 kilometres in length.
Final volumes and tonnages using an as received (laboratory measured) coal seam density of 1.41
are tabulated by seam and by category below:
RESOURCE BY SEAM

Volume (m )

Tonnes

Moisture
(adb)

GCV (adb)

kcal/kg

Ash
(adb)
%

Total
Sulphur
(adb) %

13.64

5,303

7.94

0.15

SEAM A - INDICATED

40,591,073

57,233,413

SEAM A - INFERRED

16,579,031

23,376,434

TOTAL SEAM A: INDICATED +

INFERRED

57,170,104

80,609,847

SEAM X - INFERRED

1,146,671

1,616,806

SEAM B - INFERRED

3,320,307

4,681,633

TOTAL SEAMS B1 to B5
INFERRED
TOTAL MINOR SEAMS:
INFERRED

5,096,406

7,185,932

9,563,384

13,484,371

11.85 to
15.98

4,800 to
5,600

4.15 to
15.42

0.11 to
0.42

TOTAL ALL SEAMS ALL

CATEGORIES

66,733,488

94,094,218

14.12

5,300

8.50

0.17

Volume (m )

Tonnes

Moisture
(adb)

40,591,073

57,233,413

13.64

Ash
(adb)
%
7.94

Total
Sulphur
(adb) %

INDICATED

GCV
(adb)
kcal/kg
5,303

INFERRED

26,142,415

36,860,805

TOTAL ALL CATEGORIES

66,733,488

94,094,218

14.12

5,300

8.5

0.17

RESOURCE BY CATEGORY

0.15

Outlined in Figure 1 below is a simple long section of how the various coal seams at Block 9
present. At the far left of this long section is Hole 26 and 4.5km away is Hole 37 (far right). Coal
Seam A is clearly present for the entire distance of 4.5km between these 2 holes at shallow depths.

Figure 1: Schematic Long Section (parallel to strike) of the various coal seams at Block 9

ADDRESS
Level 3, 18 Richardson Street
West Perth, WA, 6005

PHONE
T: 1300 532 786
F: 1300 391 738

WEB
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Figure 2 below demonstrates the progress of drilling to date. Completed holes are shown in red. 8
holes are still in progress (green) and the remaining holes (shown in blue) were drilled to rig limits
(150m) and will require therefore another more powerful rig to complete these holes.

Figure 2: Block 9 Drill sites for the resource drilling program - progress to date

Executive Director of Indus, Vinay Hariani commented:

ADDRESS
Level 3, 18 Richardson Street
West Perth, WA, 6005

The maiden JORC Coal Resource Estimation for Block 9 of 94,094,218 tonnes (JORC
Indicated + JORC Inferred) with an average GCV (adb) of 5,300 kcal/KG is an
outstanding result for Indus and exceeds our expectations.
The 8 drilling rigs on Block 9 continue with the 9,000 metre HQ coring program. The
ongoing drilling program will define further and extend the Indicated Resource
Category. Indus will release an updated Coal Resource Estimation for Block 9 when
further drilling and assaying has been completed.
We are working very closely with GMS on the mining engineering and the
completion of a Feasibility Study for the opening of a coal mine on Block 9 which
produces 2MT of thermal coal per annum. Preliminary mine planning has
commenced by modelling a first open pit in order to mine coal over a strike distance
of 2.8 kilometres in length (between holes 30 and 37) across a width of about 500
metres.

PHONE
T: 1300 532 786
F: 1300 391 738

WEB
info@induscoal.com.au
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Below is Figure 3 which shows the various Resource Category Triangulations. Green is Coal Seam A
(JORC Indicated), light blue is Coal Seam A (JORC Inferred) and dark blue is Coal Seam B (JORC
Inferred):

Figure 3: Plan showing Resource Category Triangulations. Green is Coal Seam A (JORC Indicated),
light blue is Coal Seam A (JORC Inferred) and dark blue is Coal Seam B (JORC Inferred).

About the Jambi Coal Projects

The Jambi Coal Projects consist of three coal bearing concessions totalling approximately 14,394ha and
which are located in the Central Tebo District, Tebo Regency Jambi Provence of Eastern Sumatra, Indonesia.
The area is a known coal producing region with a recognised export thermal grade coal product sought after
by Indian and Chinese power producers.
The projects are identified as Block 7 (5001ha), Block 8 (4380ha) and Block 9 (5013ha). Blocks 8 and 9 are
contiguous. The area is accessible year round and can be reached by a commercial direct flight from Jakarta
to Jambi. Mining is typically a low cost open cut truck and excavator type operation and coal is barged to the
open sea from a river port, where it is transhipped for delivery to export power markets. By global standards
these are traditionally low cost low CAPEX mining operations.
About Indus
Indus is focused on monetising the Jambi Coal Projects and the MukoMuko Coal Project over the next 12
months and continuing to build scale through further acquisitions with local coal partner PT Param Energy, a
company founded by Indus Executive Director Mr Vinay Hariani which is a vertically integrated coal mining
business with 15 years of experience in coal project identification, coal mining and international coal trading
in Indonesia.

ADDRESS
Level 3, 18 Richardson Street
West Perth, WA, 6005

PHONE
T: 1300 532 786
F: 1300 391 738

WEB
info@induscoal.com.au
www.induscoal.com.au

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For further information, please contact:

SCOTT DOUGLAS
Chairman

Competent Person: The information in this announcement that relates to exploration results, mineral resources or ore reserves is
based on information provided by Mr Brian Davis from the geological consulting firm Geologica Pty Ltd. Geologica Pty Ltd is a
consultant to the Company and Mr Brian Davis is a member of the Australasian Institute of Mining and Metallurgy. Mr Davis has
sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which
he is undertaking to qualify as a Competent Person as defined in the 2004 Edition of the 'Australian Code for Reporting of Exploration,
Mineral Resources and Ore Reserves'. Mr Davis consents to the inclusion in this report of the matters based on this information in the
form and context in which it appears.

ADDRESS
Level 3, 18 Richardson Street
West Perth, WA, 6005

PHONE
T: 1300 532 786
F: 1300 391 738

WEB
info@induscoal.com.au
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For personal use only

APPENDIX A
Summary Table for Resource Criteria (from JORC 2004 Edition)
A summary of the resource criteria used along with explanations (in red) relevant to Jambi Block 9
is shown on the table below:

Criteria

Explanation

Sampling
techniques.

Nature and quality of sampling (eg. cut channels, random chips etc.)
Outcrop Rock Chip sampling and HQ Diamond Core

Measures taken to ensure sample representivity.

Representative samples were taken by logging carefully the diamond core lithologies, suiting sample lengths to the lithology
boundaries, recording sample widths and weights and assaying whole core within each coal seam interval and using the
same recording, dispatch and assay techniques for all samples.

Drill type
Jacro 200 and Jacro 300 Diamond Drills

details (eg. core diameter, triple or standard tube, depth of diamond tails, face-sampling bit or other type
Full coring with HQ core as well as Touch Coring technique where drilling is by open hole chips then when roof rocks of
coal seam sequence are found the rig switches to full coring

whether core is oriented and if so, by what method, etc.).

All holes were drilled vertically and not oriented.

Whether core and chip sample recoveries have been properly recorded and results assessed.
All rock intervals were logged down hole by a geologist for each hole and recorded on lithology logs from chips or core.
Coring intervals had recovery logged and measured in relation to drill depths and recorded as a percentage on a sample log
sheet.

Measures taken to maximise sample recovery and ensure representative nature of the samples.
All core intervals were laid out in trays, measured and compared to drill depths. If any holes had significant core loss of coal
seam intervals the hole was re-drilled nearby

Whether a relationship exists between sample recovery and grade and whether sample bias may have occurred due to
preferential loss/gain of fine/coarse material.
Sample recovery did not adversely affect coal quality and generally sample recoveries exceeded 95%. There were no
indications from coal assays that samples with lower weights (either slightly lower recovery or smaller intervals) were any
different in the resulting assays when comparing the same coal seam.

Whether core and chip samples have been logged to a level of detail to support appropriate Mineral Resource
estimation, mining studies and metallurgical studies.
Geological logging of coal seams and coal measure stratigraphy was detailed and correlated well between holes and areas
of the deposit. The detailed logs were sufficient to ascertain the lithotypes, coal seam variations and boundaries as well as
changes in the coal character such as bright vitrain layers or higher detrital content, shale-rich bands etc

Whether logging is qualitative or quantitative in nature. Core (or costean, channel etc.) photography.
Core logging was qualitative as well as quantitative in nature. Detailed graphical logs and text descriptions displaying one
page to 10m of down-hole depth were kept. Each log has down-hole metres recorded for geological boundaries and the
nature of the lithology units described in detail for colour, texture, grain size, constituent minerals, oxidation state and
structural fabric such as bedding, lamination, fractures, massive , layered etc

Drilling
techniques.

Drill sample
recovery.

Logging.

ADDRESS
Level 3, 18 Richardson Street
West Perth, WA, 6005

PHONE
T: 1300 532 786
F: 1300 391 738

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Criteria

For personal use only

Sub-sampling
techniques and
sample
preparation.

Quality of
assay data and
laboratory
tests.

Verification of
sampling and
assaying.

Location of
data points.

Explanation

If core, whether cut or sawn and whether quarter, half or all core taken.
Full core intervals of coal seams (uncut) were assayed for Coal Seams A and B and other seams were assayed where they
were of economic thickness (generally + 0.5m). Roof and Floor samples of the rocks either side of the major coal seams
were taken to obtain representative major element analyses and to measure bulk density.

If non-core, whether riffled, tube sampled, rotary split etc. and whether sampled wet or dry.
Not Applicable

For all sample types, the nature, quality and appropriateness of the sample preparation technique.
Samples were prepared as whole core from the core tray in lengths not greater than 1.5m and wrapped in plastic to
preserve the as received moisture content and volume.

Quality control procedures adopted for all sub-sampling stages to maximise representivity of samples.
Coal seam samples were taken strictly by lithological boundaries, including a minimum down hole width of 0.10m for coal
seam roof and floor samples to evaluate the geochemistry of non-coal contact material.

Measures taken to ensure that the sampling is representative of the in situ material collected.
Within coal seams a minimum whole core sample weight of 0.5kg and an average of 4.29kg were submitted to the
laboratory. The complete coal seams were sampled representing a maximum down hole thickness of 1.75m, a minimum of
0.15m and an average of 1.35m

Whether sample sizes are appropriate to the grainsize of the material being sampled.
Most of the samples comprised coal, carbonaceous mudstone or roof and floor siltstones or sandstones and assay
techniques used were more than adequate to determine results from a minimum of 0.5kg weight. Since there were no
conglomerates or very coarse-grained rocks there was no sampling bias induced by grain size or affected by different
sampling techniques.

The nature, quality and appropriateness of the assaying and laboratory procedures used and whether the technique is
considered partial or total.
Assay laboratory procedures are standard for coal proximate analyses using as received (AR) compared with Air Dried Basis
(ADB). The laboratory, PT Geoservices is well regarded and all procedures are to European ISO 9000 9003 and American
ASTM standards. Coal seam intervals were assayed for Total Moisture (TM), Inherent Moisture (IM), Ash Content (AC),
Volatile Matter (VM), Fixed Carbon (FC), Total Sulphur (TS), Gross Calorific Value (GCV), Relative Density (RD) and
Hardgrove Grindability Index (HGI). Interburden or roof and floor samples were assayed separately as Ash analyses for
Silica (SiO2), Aluminium Oxide (Al2O3), Iron Oxide (Fe2O3) and Iron (Fe) as well as for ultimate analysis of Carbon (C).

Nature of quality control procedures adopted (eg. standards, blanks, duplicates, external laboratory checks) and
whether acceptable levels of accuracy (ie. lack of bias) and precision have been established.
Duplicate samples were completed routinely at the laboratory, approximately one for each group of 20 samples. Blank
sample checks were assayed after each batch as well as calibrations against manufacturers tolerance specifications for
individual equipment and instruments. ASTM standard samples were also used for calibration and testing accuracy levels of
tube furnaces, AES and ICP-OES analysers etc

The verification of significant intersections by either independent or alternative company personnel.

Samples and results forming intersections of coal seams were checked by the field geologist and the Senior Geologist at site
in Jambi, the Geology Manager in Jakarta as well as the Geological Consultant completing the resource estimation.

The use of twinned holes.

Some holes were re-drilled through Coal Seam A and effectively twinned e.g. holes DH041 and DH41RD, DH047 and
DH047RD. In all cases the re-drill holes were new sites and collars within 10 metres of the original holes. Results from these
re-drills confirmed original intercepts of Coal seam A and produced almost identical seam thickness and quality.

Accuracy and quality of surveys used to locate drill holes (collar and down-hole surveys), trenches, mine workings and
other locations used in Mineral Resource estimation.
Drill hole collars were surveyed initially with a GPS unit where co-ordinate precision was expected to be within 2 metres and
elevation precision within 10 metres. Follow-up measurements of collars were completed after drilling using standard
geodetic instrumentation for total station survey and related back to a local base station tied in to government survey
points. The precision of this technique is +/- 0.1 metres.

Quality and adequacy of topographic control.

Topographic control was generated from a regional LIDAR (Laser Interferometry Detection and Ranging) survey along with
satellite-based image by cartographic and geodetic projection and rectified to the government survey control points. The
raw data was used to generate 2.5 metre contours from data points to form the basis of a wire-framed topographic surface
for the resource area. The topographic control is considered more than adequate for resource drill hole location plots.

ADDRESS
Level 3, 18 Richardson Street
West Perth, WA, 6005

PHONE
T: 1300 532 786
F: 1300 391 738

WEB
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Explanation

Data spacing
and
distribution.

Data spacing for reporting of Exploration Results.

All drill hole spacing at Jambi Block 9 is considered appropriate for Coal Resource definition, being well within the spacing
distances between holes expected and commonly used for coal deposits.

Whether the data spacing and distribution is sufficient to establish the degree of geological and grade continuity
appropriate for the Mineral Resource and Ore Reserve estimation procedure(s) and classifications applied.
The drill hole spacing of 400m by 400m at Jambi Block 9 is suitable for Measured and Indicated Coal Resources as defined
by the USGS guidelines on coal resource definition which quote:

For personal use only

Criteria

Orientation of
data in
relation to
geological
structure.

Audits or
reviews.

Measured as Drill Hole point to 400m distance

Indicated from Measured boundary at 400m to 1200m distance
Inferred from Indicated boundary at 1200m to 4800m distance.

However both Indus and the author are taking a more conservative approach to resource definition and using a drill hole
spacing of 200m by 200m to represent Measured, 400m by 400m to represent Indicated and up to 200m further to
represent Inferred. The reasoning for this is due to the cross-sectional wire-framing technique used for interpretation of the
multiple seams, rather than the USGS standard circular technique. While the USGS system is commonly used, it was felt
that there was insufficient knowledge of the geological setting in the area to rely on purely mathematical techniques.
Therefore a technique based upon geological modelling from cross sections was applied.

Whether sample compositing has been applied.

Some of the larger coal intercepts of similar material were assayed using a composite created in the laboratory of up to 4
samples separately submitted and logged. The majority of coal seams however had no composite samples.

Whether the orientation of sampling achieves unbiased sampling of possible structures and the extent to which this is
known, considering the deposit type.
Due to the shallow dip of the coal measure stratigraphy at Block 9 the sampling orientation related down-hole within the
vertical holes was considered more than adequate. The close spacing of the holes also made it easy to discern possible
seam elevation and dip angle changes and thereby locate possible disruptive fault structures.

If the relationship between the drilling orientation and the orientation of key mineralised structures is considered to
have introduced a sampling bias, this should be assessed and reported if material.
Not Applicable

The results of any audits or reviews of sampling techniques and data.

Sampling techniques and data were reviewed weekly and each time a lithology log and hole was finished to ensure that
every sample going to the laboratory was correctly measured, identified and recorded. This was audited and signed off by
the Geology Manager and the Project Manager before each batch of samples was dispatched to laboratory.

Estimation and reporting of Mineral Resources

Database
integrity.

Measures taken to ensure that data has not been corrupted by, for example, transcription or keying errors, between
its initial collection and its use for Mineral Resource estimation purposes.
Data transfer from log and assay sheets was by hand and entered in a master database file in Microsoft Excel format. This
was checked row by row and column by column against original sheets by 3 parties, the Geology Manager, the Resource
Geologist and the VULCAN operator. An additional check against daily reports and drilling progress sheets was completed so
that any errors could be quickly identified and followed up.

Data validation procedures used.

In Maptek software VULCAN the imported csv database was validated using the automatic validation procedures in the
database import and validation functions. These procedures identify errors such as alpha codes entered instead of numerics,
duplicate sample and ID numbers, incorrect codes, negative integers, blanks instead of numbers, the use of commas instead
of decimal points etc. There were also manual checks of drill hole lithology codes and assays against summary logs and
graphical logs before the acid test of plotting drill hole sections to locate missing data, incorrect co-ordinates, elevations or
depths or erroneous lithology codes and assays.

ADDRESS
Level 3, 18 Richardson Street
West Perth, WA, 6005

PHONE
T: 1300 532 786
F: 1300 391 738

WEB
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Criteria

For personal use only

Geological
interpretation.

Explanation

Confidence in (or conversely, the uncertainty of) the geological interpretation of the mineral deposit.
The geological interpretation of the Jambi Block 9 coal deposit has been modelled from detailed diamond core logging as
well as from regional and local mapping of outcrops. The area of the concession where resource definition drilling has taken
place demonstrates good stratigraphic continuity of coal measure sequences throughout. Therefore the confidence in the
geology interpretation is high.

Nature of the data used and of any assumptions made.

The data used is based on detailed logs from diamond drilling and surface outcrop sampling. Assumptions made relate to
correlation of similar rock types and coal seams within the sequence and that there are no changes in lithology laterally
(down dip or along strike). The data supports the view that the sequence is constant and able to be correlated from hole to
hole and from hole to outcrop.

The effect, if any, of alternative interpretations on Mineral Resource estimation.

It is difficult to interpret such shallow-dipping stratigraphy in different ways and the only differences would be in linking up
the minor coal seams between holes. Any changes would have little or no impact on final resource volumes.

The use of geology in guiding and controlling Mineral Resource estimation.

A geological model was constructed in VULCAN software from the drill hole logs and this was used as a basis for guiding the
interpreted locations and linking of coal seams.

The factors affecting continuity both of grade and geology.

Factors affecting continuity of grade and geology relate to faults, changes in GCV, the weathering profile and survey
elevations of the drill holes. All these have been investigated thoroughly and although there are effects seen in relation to
faults and seam elevations, it is considered that these are minor for the whole resource. Changes in oxidation are also of a
minor nature and there seem to be no differences between assays for oxidised outcrop samples compared with assays for
the seam within drill holes. Plots of Seam A GCV and thickness contours indicate that there is some variation along strike
which could be explained by minor faults and changes in coal seam dips between them.
The extent and variability of the Mineral Resource expressed as length (along strike or otherwise), plan width, and
depth below surface to the upper and lower limits of the Mineral Resource.
The drilled coal resource extends 6 kilometres along strike and a minimum of 650m down dip from outcrop and has been
intersected to 140m below surface. Coal Seam A has an average of 10.86m down-hole thickness and 5,303 kcal/kg (adb).

ADDRESS
Level 3, 18 Richardson Street
West Perth, WA, 6005

PHONE
T: 1300 532 786
F: 1300 391 738

WEB
info@induscoal.com.au
www.induscoal.com.au

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Criteria

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Estimation and
modelling
techniques.

Moisture.

Cut-off
parameters.
Mining factors
or
assumptions.

Explanation

The nature and appropriateness of the estimation technique(s) applied and key assumptions, including treatment of
extreme grade values, domaining, interpolation parameters, maximum distance of extrapolation from data points.
The estimation technique was the use of cross-sectional outlines and geological interpretation and wire-framing of Seams A
and B to derive volumes. No domains were used, nor were any areas partitioned into domains. The influence of oxidation on
the coal was examined by comparing outcrop samples with drilled intercepts and there was no significant difference in
proximate analyses. Therefore interpreted seam outlines in section were projected to surface. Separate wire-frames for
Inferred and Indicated Resource categories were generated .Extension of resource continuity between drill holes was
excellent. Maximum distance of extrapolation away from data source was 200 metres for Indicated and 400 metres for
Inferred Resource categories. Statistics show that there is low ash content, very low sulphur content and no significant GCV
variability within the coal seams. There are also no significant variations in seam character with depth or in lateral
continuity.
The availability of check estimates, previous estimates and/or mine production records and whether the Mineral
Resource estimate takes appropriate account of such data.
There is no production data from Jambi Block 9, however nearby concessions within a few kilometres are producing and
exporting good quality thermal coal with similar parameters. Assays of coal from PT Elion concession to the SE of Block 9
demonstrate almost identical moisture, ash and sulphur values with slightly higher GCV.
The assumptions made regarding recovery of by-products.
There are no planned by-products
Estimation of deleterious elements or other non-grade variables of economic significance (e.g. sulphur for acid mine
drainage characterisation).
Samples were routinely tested for sulphur in the proximate analyses. Ash analysis and aluminium content (clay material)
within and adjacent to coal seams was also tested. There was no indication that the material was too acidic or alkaline or
would affect mine drainage water.
In the case of block model interpolation, the block size in relation to the average sample spacing and the search
employed.
Not applicable no block model used
Any assumptions behind modelling of selective mining units.
Not Applicable -No selective units have been used
Any assumptions about correlation between variables.
GCV variability is low as are all of the quality attributes. Seam thickness variability is easily modelled and only occurs over a
large distance.
The process of validation, the checking process used, the comparison of model data to drillhole data, and use of
reconciliation data if available.
Validation of the database was completed against original lithology logs, survey records and assay files by three
independent checks and at every database update (3 during the course of the resource estimation). Wireframes were
checked against interpreted cross-section outlines on every section as well as long sections. Internal validation procedures
were also completed on VULCAN software to ensure that each triangulation was snapped to the correct point and volumes
were closed.
Whether the tonnages are estimated on a dry basis or with natural moisture, and the method of determination of the
moisture content.
Tonnages are determined from wire-framed in situ volumes and Relative Density as received i.e. wet density as found in the
ground. Further work is being undertaken to establish bulk density for mining.
The basis of the adopted cut-off grade(s) or quality parameters applied.
Quality parameters relate to minimum coal seam mining width of 0.5m, maximum contained waste thickness of 0.5m and
average GCV (adb) of mineable coal seam to exceed 5,000 kcal/kg.
Assumptions made regarding possible mining methods, minimum mining dimensions and internal (or, if applicable,
external) mining dilution. It may not always be possible to make assumptions regarding mining methods and
parameters when estimating Mineral Resources. Where no assumptions have been made, this should be reported.
After resource estimation and analysis of coal and waste material assumptions made about mining methods were:
1 Shallow dip allows for open cut mining methods using Indonesian standard excavator and truck operation
2 Visual grade control for interburden and overburden can be used
3 Assumed maximum dilution of 0.5m internal waste and 0.15m external waste, although good mining practises would
avoid generating this waste.
4 Assumed mining unit is 2m by 4m to suit a small excavator
5 Assumed coal density of 1.41 and waste density of 2.21 based on Relative Density measurements at the laboratory
6 Due to the high moisture content, drainage of stockpile pads and other methods for reducing moisture (including the
LAMIFLOW process) are assumed to be part of the ongoing mine development.

ADDRESS
Level 3, 18 Richardson Street
West Perth, WA, 6005

PHONE
T: 1300 532 786
F: 1300 391 738

WEB
info@induscoal.com.au
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Criteria

For personal use only

Metallurgical
factors or
assumptions.
Bulk density.

Classification.

Audits or
reviews.

Explanation

The basis for assumptions or predictions regarding metallurgical amenability. It may not always be possible to make
assumptions regarding metallurgical treatment processes and parameters when reporting Mineral Resources. Where
no assumptions have been made, this should be reported.
This resource estimation has no assumption about processing parameters of the coal.
Whether assumed or determined. If assumed, the basis for the assumptions. If determined, the method used, whether
wet or dry, the frequency of the measurements, the nature, size and representativeness of the samples.
Relative densities were reported from the laboratory for both coal seams and roof/floor samples. A total of 138 samples for
Seam A, 81 samples for other seams and 118 samples for non-coal material were estimated for relative density on as
received samples. These measurements are in situ density, not bulk density. Estimations of volume swell factors and tests on
coal from trial mining will allow a more detailed calculation of bulk density for mining tonnages and volumes.
The basis for the classification of the Mineral Resources into varying confidence categories.
The drill hole spacing of 400m by 400m at Jambi Block 9 is suitable for Measured and Indicated Coal Resources as defined by
the USGS guidelines on coal resource definition which quote:

Measured as Drill Hole point to 400m distance

Indicated from Measured boundary at 400m to 1200m distance
Inferred from Indicated boundary at 1200m to 4800m distance.

However Indus and the author are taking a more conservative approach to resource definition and using a drill hole spacing
of 200m by 200m to represent Measured, 400m by 400m to represent Indicated and up to 200m further to represent
Inferred. The reasoning for this is due to the cross-sectional wire-framing technique used for interpretation of the multiple
seams, rather than the USGS standard circular technique. While the USGS system is commonly used, it was felt that there
was insufficient knowledge of the geological setting in the area to rely on purely mathematical techniques. Therefore a
technique based upon geological modelling from cross sections was applied.
Whether appropriate account has been taken of all relevant factors. i.e. relative confidence in tonnage/grade
computations, confidence in continuity of geology and metal values, quality, quantity and distribution of the data.
Confidence in tonnage and volumes is good due to collection of good density and assay data for both coal seams and waste
and known good geological continuity of coal seams from drilling.
Whether the result appropriately reflects the Competent Person(s) view of the deposit.
The Competent Person continually reviewed the resource drilling program and supervised the collection of data as well as
completed the resource estimation
The results of any audits or reviews of Mineral Resource estimates.
Volume calculations, wireframe locations/orientations as well as validity and applicability of the estimation parameters was
checked by independent experts at Global Mining Consultants and found to be of sound principles and conforming to
industry standards. Plots of coal seam thickness and GCV values were completed for Coal Seam A to validate the volume and
seam quality and statistical reviews of other minor seams were completed to check GCV quality and thickness variability.
The results in all cases were that there is only minor GCV variability (STDEV of 114 or 2% for Coal Seam A) in seam quality
and minor variability in seam thickness.

ADDRESS
Level 3, 18 Richardson Street
West Perth, WA, 6005

PHONE
T: 1300 532 786
F: 1300 391 738

WEB
info@induscoal.com.au
www.induscoal.com.au

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ASX Announcement
4 September 2013
ASX: ICZ

Explanation

Discussion of
relative
accuracy/
confidence.

Where appropriate a statement of the relative accuracy and/or confidence in the Mineral Resource estimate using an
approach or procedure deemed appropriate by the Competent Person. For example, the application of statistical or
geostatistical procedures to quantify the relative accuracy of the resource within stated confidence limits, or, if such
an approach is not deemed appropriate, a qualitative discussion of the factors which could affect the relative accuracy
and confidence of the estimate.
The relative accuracy of volume estimation from wire-frames was checked by mathematical software methods, but this does
not account for the reliability of the basic data that is being wire-framed.

For personal use only

Criteria

Factors that could affect the relative accuracy of the resource are as follows:
Variability in coal density for tonnage estimation, however this is known to be very low.
Variability in drill collar surveys due to the surface terrain. However the drill collar surveys have been checked and
reconciled against the regional LIDAR topography surface and are considered sufficiently accurate for Indicated
and Inferred Coal Resources.
Reliability of coal seam down-hole thicknesses due to core loss or poor logging practices. However holes where
there was significant core loss in Coal Seam A intercepts were re-drilled to confirm seam width. Also lithology logs
were checked and reconciled for down-hole depths of coal seam intervals and geological units were plotted and
checked on sections.
Interpretation of coal seam continuities on sections. Coal seam dips were validated by consistent interpretation of
Coal Seam A in a minimum of two holes per section and often also with outcrops and comparison with sections
ahead and behind to understand relative (minor) changes in dip.
The statement should specify whether it relates to global or local estimates, and, if local, state the
relevant tonnages or volumes, which should be relevant to technical and economic evaluation. Documentation should
include assumptions made and the procedures used.
The Jambi Block 9 coal tonnages and volumes quoted in this resource estimation fall under the Inferred and Indicated
categories. The methods used are fully explained in this document.
These statements of relative accuracy and confidence of the estimate should be compared with production data, where
available.
Not available at Block 9, but assays of coal from PT Elion concession to the SE of Block 9 demonstrate almost identical
moisture, ash and sulphur values with slightly higher GCV. This company is currently exporting thermal coal from a multiple,
narrow seam deposit. Their production facilities are basic and they have not encountered any major problems with mining,
haulage or stockpiling and export.

ADDRESS
Level 3, 18 Richardson Street
West Perth, WA, 6005

PHONE
T: 1300 532 786
F: 1300 391 738

WEB
info@induscoal.com.au
www.induscoal.com.au

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