PT.

GANDA DINAMIKA

General Review M-31

August 2010
Prepared by,

Technical Team of
PT. Samuel International
 STATUS & LEGAL Technical Team of
PT. Samuel International

PT Ganda Dinamika approx. 11,690 Ha devided by 2 blocks East Block consist of 18 seam and West Block consist of 20
seam, that already got IUP Hauling & Selling from Bupati for 5 years and expired on 2012. This concession has been
conducted exploration (5% of total area) and 75% of total area inside of coal bearing formation (Manumbar & Domaring)
2
 RECONCILIATION OF MEMR Technical Team of
PT. Samuel International

Based on Announcement Reconciliation IUP from MEMR, PT. Ganda Dinamika

still not being registered as a CLEAN & CLEAR concession who need to make a
written response and objection being addressed to the Mining License
Authorized Issuer (Bupati Kutai Timur Regency).
3
 ACCESSIBILITY MAP Technical Team of
PT. Samuel International

Project
Location

Makassar Straits

PT. Ganda Dinamika area approx. 11,690 Ha, with IUP Exploitation status administratively located at Muara Bulan Village –
Karangan, East Kutai District, East Kalimantan Province. Geographically is located on 010 15’ 12.4” – 010 21’ 35.6” LU and 1170 35’ 40.5”
– 1170 42’ 18.3” BT. Location can be reached from the city of Sangatta via overland journey is 135 km with approximately 5 hours
travel time by using 4WD vehicle. From Jakarta – Balikpapan – Sangatta (Air Travel for 3 hours) then land journey 5 hours to north.
4
 MORPHOLOGY & LITHOLOGY
Technical Team of
PT. Samuel International

Morphology Condition

Lithology Condition
5
 GEOLOGY FORMATION Technical Team of
PT. Samuel International

PT Ganda Dinamika contained in Muara Alasan Quadrangle where the existence of coal at research sites including in 2 major coal bearing formations,
Domaring (Tmpd) and Manumbar (Tmme), consists of Mudstone, claystone, sandstone intercalations with limestone and coal. Clay stone thickness of
beds between 1-2 cm, locally intercalating with coal, some of them to 16 meter thick which is based on coal characteristics, stratigraphy, thickness and
trajectory data are interpreted to be 20 seams traverse. General investigation of the coal layer in areas trending N37 0E - N2600E, with a slope of 150-380,
coal thickness ranges from 1.2 - 16.25 m. 6
 OVERLAPPING AREA Technical Team of
PT. Samuel International

Status of PT Ganda Dinamika approx. 16,690 Ha as follow:

1. With KP/PKP2B, indicated as relinquishment area of PT Indexim Coalindo (CCoW), need to be rechecked by
MEMR Affair East Kutai District, East Kalimantan Province.
2. With Plantation, indicated overlap with PT. Bina Agri Sawit (BAS), PT. Telen, CV. Riri Mandiri Utama
(community-owned oil palm seedlings), need to be rechecked by Plantation Affair, East Kutai Regency.
7
 FORESTRY STATUS Technical Team of
PT. Samuel International

Status of PT Ganda Dinamika approx. 16,690 Ha as follow:

1. With Forestry, Most area (95%) inside of Other Uses (APL) Status that not required Pinjam Pakai permit
2. With HPH or IUPHHK, 5% overlap with HTI PT. Sumalindo Lestari Jaya, need to be clearance with the
forestry company
3. The rest area (5%) inside of Production Forest 8
 COAL LOGISTIC Technical Team of
PT. Samuel International

PT. Ganda Dinamika total area approx. 11,690 Ha, as current status IUP Selling & Hauling, potentially
using logistic route as follow:
- Hauling distance to Big Palawan River Port approx. 32 km.
- Barging to Muara Rapak Transhipment Point approx. 60 km by using 320ft barge size.
9
 RESOURCES & QUALITY Technical Team of
PT. Samuel International

1. TOTAL RESOURCES (Mineable Reserve + Resource Outpit) @ 500 Ha = 11,093,531 Tons

2. POTENTIAL RESOURCES FOR TOTAL AREA @ 11,690 Ha = 65,888,645 Tons (assume 65% of area still
not explored classified as Resources)
10
COAL SEAM CORRELATIONS Technical Team of
PT. Samuel International

Pt Ganda Dinamika Consist Of Two (2) Area Of Coal Potential,

West Block (20 Seams) And East Block (18 Seams) Types Of
Coal, Low Rank Coal.
From Exploration Report, There Are 29 coal Seams spread
from west to east with thickness 1.2 – 16.25m.
11
 COAL QUALITY & PRICE Technical Team of
PT. Samuel International

TYPICAL QUALITY LOCATION RESOURCES

PARAMETER BASIS TYPICAL RESOURCE MEASURED INDICATED INFERRED TOTAL
A. Total Moisture, Weight % ARB 42.17
WEST BLOCK 2,017,245 3,075,903 18,745,214 23,838,363
B. Proximate Analysis, Weight % EAST BLOCK 5,914,832 8,017,628 28,117,822 42,050,282
Moisture in the Analysis Sample ADB 16.62
Ash Content ADB 4.08 TOTAL 7,932,077 11,093,532 46,863,036 65,888,645
Volatile Matter ADB 43.60
Fixed Carbon ADB 38.14
C. Total Sulphur, Weight % ADB 0.98
D. Gross Calorific Value, Kcal/kg
GCV (ar) ARB 3,724
GCV (adb) ADB 5,360
GCV (db) DB 6,428
GCV (daf) DAF 6,701
E. Density 1.30

GD Coal CV Kcal/kg 3,724

CV GAR based on HPB Marker 8 Kcal/kg 4,200
Benchmark Price (Ecocoal) $ 61.40
Basic Coal Price $ 45.70

Price factor 10%

Projected Long Term Coal GD /ton $ 41.13
(per ton FOB M/Vessel)

12
 CAPITAL COST (CAPEX) Technical Team of
PT. Samuel International

DETAIL COST (US $)

NO KEGIATAN GANDA DINAMIKA
JUMLAH
TOTAL PROJECT Year 0 Year 1 Year 2
New Road 5 5 0 0
Acq. Road width 50 50 50 50
Upgrade Road 27 20 7 0
Acq. Road width 20 20 20 20
Bridge 1 0 0 0
1 PRELIMINARY & GENERAL DEVELOPMENT
a - General - Preparation (include Down Payment) 605,556 605,556 302,778 302,778
b - Drilling Exploration & Coal Analysis (estimate 10000m) 666,667 666,667 333,333 166,667 166,667
c - Permitting & Documentation 500,000 500,000 500,000
d - Design and Engineering 15,000 15,000 10,000 5,000 0
e - Land Acquisition Mine Area (1500 Ha) @ IDR 35,000,000 3,889 5,833,333 2,916,667 1,944,444 972,222
f - Land Acquisition Haul Road Location @ IDR 35,000,000 3,889 307,222 252,778 54,444 0
g - Land Acquisition Port Location (10 Ha) @ IDR 50,000,000 5,556 55,556 27,778 13,889 13,889
Sub Total No.1 7,983,333 4,343,333 2,487,222 1,152,778
2 CONSTRUCTION - MINING, AREA FACILITIES & INFRASTRUCTURE
a Civil Work at Mine & Facilities Area
Land Clearing, Cut-Fill at Mining Area 20,000 20,000 15,000 5,000
Land Clearing, Cut-Fill at Area Facilities 30,000 30,000 20,000 7,500 2,500
Land Clearing, Cut-Fill at Camp Facitilies & Access 50,000 50,000 25,000 15,000 10,000
b Mine Facilities - Structure, Building
Office & Area Facilities (Office, Workshop, etc) 150,000 150,000 100,000 50,000
Camp Facilities 100,000 100,000 75,000 25,000
Sub Total No.2 350,000 235,000 102,500 12,500
3 CONSTRUCTION - HAUL ROAD
a Bridge Construction 500,000 500,000 500,000.00 - -
b New Coal Haul Road Development 250,000 1,250,000 1,250,000 - -
c Upgrading Existing Haul Road 75,000 2,025,000 1,500,000 525,000 -
Sub Total No.3 3,775,000 3,250,000 525,000 0
4 CONSTRUCTION - PORT
a Earth Movement and Civil Work 500,000 500,000 250,000 125,000 125,000
b Weight Bridge 60 Ton Capacity 64,433 64,433 64,433 0 0
c Coal Crushing Plant (250 TPH) 875,849 875,849 875,849 0 0
d Barge Loading Conveyor (500 TPH) 1,117,796 1,117,796 279,449 558,898 279,449
e Ground Pilling (BLC, ROM and Crusher) 165,680 165,680 41,420 82,840 41,420
f Dolphin and Tower Support Pilling 264,824 264,824 66,206 132,412 66,206
g Port Support Facilities 391,600 391,600 97,900 195,800 97,900
Sub Total No.4 3,380,182 1,675,257 1,094,950 609,975
5 Support and Services
Consultant Supervision and Quality Control 250,000 250,000 100,000 100,000 50,000
Health, Safety & Environmental 100,000 100,000 25,000 50,000 25,000
Sub Total No.5 350,000 125,000 150,000 75,000
6 Continguency & Escalation
Continguency 791,926 481,430 217,984 92,513
Sub Total No.6 791,926 481,430 217,984 92,513
GRAND TOTAL 16,630,441 10,110,020 4,577,656 1,942,765

13
 OPERATING COST (OPEX) Technical Team of
PT. Samuel International

Mining @ Strip Ratio 4.99 bcm/ton (Low Rank)

CAPITAL COST COST NPV ANALYSIS
NO LOGISTIC OPTION DISTANCE
US$ Million (US$/T) NPV
1 GD LOW RANK Hauling 32 km; Barging 60 km 16.63 30.66 102,116,552

GANDA DINAMIKA (Expected Rate) GANDA DINAMIKA

Key assumptions GD LOW RANK
Potential Contractor LOCAL
Mining Cost Items
Stripping Ratio 4.99
Coal Hauling Distance 32
Coal Barging Distance 60

Exp. Rate
No Activities Unit
1 O/B removal $/bcm 2.10 10.48
2 Coal getting $/Ton 1.50 1.50
3 Coal hauling $/ton/km 0.10 4.00
4 Crushing $/Ton 1.67 1.67
5 Quality Control (Surveyor) $/Ton 0.10 0.10
6 Stockpiling & Port Handling $/Ton 1.50 1.50
7 Barging $/ton/km 0.05 2.70
8 Reclamation and Com Dev $/Ton 0.50 0.50
9 Overhead $/Ton 1.50 1.50
10 Transhipment & document $/Ton 2.50 2.50
11 Investment recovery $/Ton 1.41 1.41

12 Royalti (FOB Barge) $/Ton 5% 1.80

13 JO Fee $/Ton 1.00 1.00
Total mining cost/ton 30.66
FOB Barge Logistic Cost 6.70
Percentage Logistic 22%

Coal Price USD $ 41.13

Exchange IDR 9000

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 PRODUCTION COST
Technical Team of
PT. Samuel International

GANDA DINAMIKA RESERVES Key assumptions Ganda Dinamika Low Rank

Waste Removal 328,784,339 12 Coal Prices $ 41.13 FOB Mother Vessel
Coal Mining (Resources) 65,888,645 13 Yield Production Recovery 95%
Stripping Ration 5.0 14 Royalty to GOI 5.0%
13 Tax rate 10%
14 Depreciation method Unit of production

GANDA DINAMIKA
Production = Production max 6,000,000 MT
Plan of Develoment
Year Year Y0 Y1 Y2 Y3 Y4 Y5 Y6 Y7 Y8 Y9 Y10 Total
(Mton)
Ganda Dinamika 0.6 1.2 2.4 3.6 4.8 6.0 6.0 6.0 6.0 6.0 42.64
.
Total 0.6 1.2 2.4 3.6 4.8 6.0 6.0 6.0 6.0 6.0 42.64

Coal Price
Year Y0 Y1 Y2 Y3 Y4 Y5 Y6 Y7 Y8 Y9 Y10
Scenario 1 (Stable @0%) Ganda Dinamika 41.1 41.1 41.1 41.1 41.1 41.1 41.1 41.1 41.1 41.1
Scenario 2 (Increase @2.5%) Ganda Dinamika 41.1 42.2 43.2 44.3 45.4 46.5 47.7 48.9 50.1 51.4
Operating Cost

Scenario 1 (Stable @0%) 28.9 28.9 28.9 28.9 28.9 28.9 28.9 28.9 28.9 28.9
Scenario 2 (Increase @2.5%) 28.9 29.6 30.3 31.1 31.9 32.7 33.5 34.3 35.2 36.0

Revenue (net 95% recovery)

Year Y0 Y1 Y2 Y3 Y4 Y5 Y6 Y7 Y8 Y9 Y10 Total
Scenario 1 Ganda Dinamika 25.08 46.88 93.77 140.65 187.54 234.42 234.42 234.42 234.42 234.42 1,666

Price stable
Cost Stable 25.08 46.88 93.77 140.65 187.54 234.42 234.42 234.42 234.42 234.42 1,666

Royalty to GOVT Ganda Dinamika (1.15) (2.16) (4.31) (6.47) (8.62) (10.78) (10.78) (10.78) (10.78) (10.78)

Scenario 2 Ganda Dinamika 25.08 48.06 98.52 151.47 207.01 265.23 271.86 278.65 285.62 292.76 1,924

Price @ 2.5% -
Cost @2.5% 25.08 48.06 98.52 151.47 207.01 265.23 271.86 278.65 285.62 292.76 1,924

Royalty to GOI Ganda Dinamika (1.15) (2.22) (4.56) (19.00) (26.05) (33.48) (34.42) (35.39) (36.38) (37.39)

Operating cost/ton Y0 Y1 Y2 Y3 Y4 Y5 Y6 Y7 Y8 Y9 Y10

Stable Ganda Dinamika (18.53) (34.63) (69.27) (103.90) (138.54) (173.17) (173.17) (173.17) (173.17) (173.17)

Ganda Dinamika (18.53) (35.50) (72.77) (111.89) (152.92) (195.93) (200.82) (205.84) (210.99) (216.26)
Escalate 2.5% @ year

15
 NPV ANALYSIS Technical Team of
PT. Samuel International

Scenario 1 (Stable Coal Price & Operating Cost)

1 2 3 4 5 6 7 8 9 10

Total
YR 0 YR 1 YR 2 YR 3 YR 4 YR 5 YR 6 YR 7 YR 8 YR 9 YR 10

Revenue a 1,666.0 25.08 46.88 93.77 140.65 187.54 234.42 234.42 234.42 234.42 234.42
Operating Cost b (1,230.7) (18.53) (34.63) (69.27) (103.90) (138.54) (173.17) (173.17) (173.17) (173.17) (173.17)
Royalty to GoI c (76.6) (1.15) (2.16) (4.31) (6.47) (8.62) (10.78) (10.78) (10.78) (10.78) (10.78)
Capital Expenditure e (16.6) (10.11) (4.58) (1.94)
Life of mine exploration cost f (1.4) (0.35) (0.10) (0.10) (0.10) (0.10) (0.10) (0.10) (0.10) (0.10) (0.10) (0.10)

Year
Tax calculation Total
YR 0 YR 1 YR 2 YR 3 YR 4 YR 5 YR 6 YR 7 YR 8 YR 9 YR 10
Capex depreciation h e x (P/R) (17) (0.25) (0.47) (0.94) (1.40) (1.87) (2.34) (2.34) (2.34) (2.34) (2.34)
Profit Before Tax (Simplified) i a+b+c+d+f+h (10.46) 0.72 8.05 20.09 30.18 40.28 50.37 50.37 50.37 50.37 50.37
Tax Payment j i x 25% (0.18) (2.01) (5.02) (7.55) (10.07) (12.59) (12.59) (12.59) (12.59) (12.59)
Annual Cash Flow (a+b+c+d+e+f+j) (10.46) 0.54 6.04 15.07 22.64 30.21 37.78 37.78 37.78 37.78 37.78

Net cumm. cash flow (10.46) (9.92) (3.88) 11.19 33.83 64.04 101.82 139.60 177.38 215.16 252.94

IRR 80.08%
NPV (in million) $102.1
Discount Factor 12%
Pay Back Period 2.26

Scenario 2 ( Coal Price & Operating Cost Increase 2.5 %)

- 1 2 3 4 5 6 7 8 9 10
Year
Total
YR 0 YR 1 YR 2 YR 3 YR 4 YR 5 YR 6 YR 7 YR 8 YR 9 YR 10

Revenue a 1,899.2 25.08 48.06 98.52 151.47 207.01 265.23 271.86 278.65 285.62 292.76
Operating Cost b (1,402.9) (18.53) (35.50) (72.77) (111.89) (152.92) (195.93) (200.82) (205.84) (210.99) (216.26)
Royalty to GoI c (228.9) (1.15) (2.22) (4.56) (19.00) (26.05) (33.48) (34.42) (35.39) (36.38) (37.39)
Capital Expenditure e (16.6) (10.11) (4.58) (1.94)
Life of mine exploration cost f (1.4) (0.35) (0.10) (0.10) (0.10) (0.10) (0.10) (0.10) (0.10) (0.10) (0.10) (0.10)

Year
Tax calculation Total
YR 0 YR 1 YR 2 YR 3 YR 4 YR 5 YR 6 YR 7 YR 8 YR 9 YR 10
Capex depreciation h e x (P/R) (17) (0.25) (0.47) (0.94) (1.40) (1.87) (2.34) (2.34) (2.34) (2.34) (2.34)
Profit Before Tax (Simplified) i a+b+c+d+f+h (10.46) 0.72 8.30 21.08 20.48 27.94 35.72 36.51 37.32 38.15 39.00
Tax Payment j i x 25% (0.18) (2.07) (5.27) (5.12) (6.99) (8.93) (9.13) (9.33) (9.54) (9.75)
Annual Cash Flow (a+b+c+d+e+f+j) (10.46) 0.54 6.22 15.81 15.36 20.96 26.79 27.39 27.99 28.62 29.25

Net cumm. cash flow (10.46) (9.92) (3.70) 12.12 27.48 48.43 75.22 102.61 130.60 159.22 188.47

IRR 72.40%
NPV (in million) $75.8
Discount Factor 12%
Pay Back Period 2.23

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 CAST FLOW ANALYSIS Technical Team of
PT. Samuel International

Option Cash Flow Y0 Y1 Y2 Y3 Y4 Y5 Y6 Y7 Y8 Y9 Y10 INPUT DATA

1 GD LOW RANK (10.46) (9.92) (3.88) 11.19 33.83 64.04 101.82 139.60 177.38 215.16 252.94
RESOURCES TON 65,888,645
SUMMARY CASH FLOW PARAMETER UNIT
SUMMARY
PT. GANDA DINAMIKA GD LOW RANK

300.00 STRIPPING RATIO BCM/T 4.99

COAL PRICE US$ 41.13

250.00 252.94
CAPEX US$ 16,630,441
OPEX US$/T 30.66
215.16 ROYALTI US$/T 1.80
200.00
JO FEE US$/T 6.00
US$ MILLION

177.38
IRR (LOM or 5YP) % 80.08%
150.00
139.60
NPV (LOM or 5YP) US$ 102,116,552

Production Scale Mtpa 2.53

100.00 101.82
Life of Mine Year 26.06

64.04
Rate Exchange IDR 9000
50.00
Discount Factor % 12%
33.83
Price Factor % 10%
11.19
0.00 (3.88)
(10.46) (9.92)

-50.00
Y0 Y1 Y2 Y3 Y4 Y5 Y6 Y7 Y8 Y9 Y10
GD LOW
(10.46) (9.92) (3.88) 11.19 33.83 64.04 101.82 139.60 177.38 215.16 252.94
RANK

17
 RECOMMENDATION Technical Team of
PT. Samuel International

Generally this concession is potential and will be consider to

follow up with conducting Site Investigation by getting data:

 Detail geology information

 Checking geology data esp. for North East Area
 Site survey and meet with geologist and owner
 Quantity and Quality assurance by doing check drill
 Legality clarification
 Mining status and permit
 Overlapping issues and community
 Facilities and infrastructure review (mine to port)
 Negotiation on Take Over or Join Operation Fee
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 Technical Team of
PT. Samuel International
APENDICES – IUP (Ext.) EXPLORATION Technical Team of
PT. Samuel International
COAL OUTCROPS Technical Team of
PT. Samuel International
 Technical Team of

SUMMARY OUTCROPS…(1)
PT. Samuel International
 Technical Team of

SUMMARY OUTCROPS…(2)
PT. Samuel International
 Technical Team of

SUMMARY OUTCROPS…(3)
PT. Samuel International
SOME LAND USES INSIDE OF Technical Team of
PT. Samuel International

CONCESSION