A majority of number of drill holes are “touch” cored and samples were submitted for analytical testwork, which typically included Total Moisture, Proximate Analysis, Total Sulphur, Calorific Value and
Relative Density test work. Key observations in regard to the coal qualities are as follows:
‰ detailed coal quality data is available for all seams except Seam 1, ‰ coal quality data from mined out areas has been used to supplement drill core quality data,
‰ “touch” coring results in some coal seam roof loss, therefore in thinner seams there may be a degree of sample bias.
4.3 Geological Database and Modelling
Geological Database Key elements of the geological database to the end of March 2008 were reviewed by MMC and the
following noted: ‰ total of 4,727 open holes have been drilled,
‰ drillholes are typically less than 60 m in depth, ‰ the majority of drillholes have not been geophysically logged, although recent drillholes have been
geophysically logged, ‰ a large number of drillholes have been “touch” cored for coal quality analysis, and
‰ all drillhole locations have been surveyed. The majority of proposed pit areas has been subject to drilling at 50-100m spacing while the remainder
of the potential open pit areas has been largely subject to semi-detailed drilling approximately 250-500 m spacing. Drilling in potential open cut areas is typically shallow less than 60 m depth, however deeper hole
drilling has been conducted in potential underground mining areas of several seams on a 500m grid spacing.
Geophysical logging which provides a high degree of certainty of data accuracy has not been routinely conducted at GBP Block 2 although recent drillholes have been geophysically logged. It is recommended that
any future drilling include geophysical logging. The typical suite of geophysical logs for coal exploration includes natural gamma, in situ rock density and calliper borehole diameter. The data that can be obtained
includes seam depth and thickness, seam partings, indicative seam quality ash, seam correlations and identification of faults.
Drillholes have been drilled “open hole” i.e. non-cored with “touch” coring of intersected coal seams. This methodology is widely used in the Indonesian coal industry and is generally acceptable in terms of
providing reliable seam data when coal core recoveries are typically greater than 90 based on geologists drill logs. However some coal roof losses do occur through “touch” coring and this can be considered a material issue
in the interpretation of thin seams Note: MMC has considered this in resource categorisation.
In summary, GBP Block 2 has been subject to relatively detailed, predominantly shallow open hole drilling with “touch” coring of coal seams. However due to the limited geophysical logging, MMC is of the
opinion that the majority of Coal Resources are of Indicated status. Ongoing detailed drilling at GBP Block 2, including deep hole drilling, additional coal quality data and
geophysical logging is expected to raise the level of confidence of Coal Resource estimates in future reports. Survey
Detailed topographic survey has been conducted over study area and all drillholes have been surveyed by Total Station. Survey of mined out coal seams is conducted routinely and the geological model includes floor
survey data for current active pits. Geological Modelling
All data including drill logs, coal quality and drillhole survey data have been input into an electronic database. Using Mincom “Stratmodel” mining computer software, Bayan geologists have created a 3-D “surface”
model of the deposit. A surface model is built up from individual layers including topographic surface, weathering surface, seam roofs and floors. Mincom software is capable of modelling seam splits and faults.
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Model Conversion and Resource Estimation The Mincom model was provided to MMC in “gridded” model format and was converted to Minex
computer software format. The Minex model was validated against the original Mincom models by comparing total volume of waste and coal and found to have a high degree of accuracy. MMC Coal Resource estimates were
derived from the Minex model output.
Coal Density MMC used Relative Density RD obtained by applying the Preston-Sanders formula to convert the air
dried RD modelled by GBP Block 2 from analyses of coal cores to in situ RD.
4.4 Data Validation
MMC undertook extensive validation of the GBP Block 2 database in order to validate the geological model and to determine the resource categories on which Coal Resource estimates were based, including review
of the following: ‰ a significant number of original drill logs in order to validate the coal seam intercepts recorded in the
computer database, ‰ drillhole plans for each seam,
‰ output from the Mincom geological model was reviewed for accuracy in relation to the available drilling data,
‰ typical cross-sections across the pits, and ‰ coal quality plans and tabulations.
In summary, the database is of an adequate standard and the work has been undertaken by competent professionals. A copy of the model was provided to MMC and MMC is of the opinion that the geological model
is of sufficient accuracy to be used for Coal Resource estimation. There are no fatal flaws identified, however the following observations are made in relation to the level of confidence of the database and model:
‰ thin seam interpretation is of lower confidence than for thicker seams due to the use of “touch” coring and the absence of geophysical logging, and
‰ the lack of supporting geophysical logging data in a large majority of drillholes lowers the overall level of confidence in the database and model such that the Coal Resource estimates can only be of
maximum Indicated status where geophysical logging is not available.
4.5 Geological Confidence And Resource Categories
Open-cut Geological Resources are defined as that part of the identified in-situ coal “with reasonable prospects for eventual economic extraction”
JORC Code, 2004. The JORC Code identifies three levels of confidence in the reporting of resource categories as follow:
‰ Measured—“that part of a Mineral Resource for which the tonnage, densities, shape, physical
characteristics, grade and mineral content can be estimated with a high level of confidence”. Note: bolding added by MMC.
‰ Indicated—“… estimated with a reasonable level of confidence”. ‰ Inferred—“… estimated with a low level of confidence”.
Determination of “level of confidence” by MMC was based on the categorising the following seam characteristics as “simple”, “moderate” or “complex” based on the following criteria:
‰ variability of seam thickness including seam splitting, ‰ variability in coal quality parameters, and
‰ structural complexity. A-47
