Established in March 2008, BEK initially obtained an Exploration KP from the regional government in January 2009 to explore and develop a coal concession in East Kalimantan province. It secured a Production Operation IUP for the concession in April 2010 and subsequently commenced commercial production in February 2012, with a design production capacity of 2 to 3 million tonnes of coal per year. The IUP is valid for 20 years and can be extended twice for a period of ten years each.

In 2013, BEK produced about 1.49 million tonnes of coal, a 54% increase from 964,000 tonnes produced in 2012. The coal is a low-rank thermal coal, with low ash and low sulphur content.

The BEK concession covers an area of 4,570 ha and is administratively located within Tering and Long lram districts, Kutai Barat regency,
East Kalimantan, approximately 180 km straight line distance northwest of the provincial capital of Samarinda.

Access to the concession is via an approximate eight hours drive from Balikpapan or a one hour flight from Balikpapan to Sendawar, followed by a one and a half hour drive from Sendawar.

 Category   Mineral Type  Gross Attributable to License 1    Net Attributable to Issuer 4  Remarks
Grade Tonnes
Grade Change from
previous update
Reserves 5
Proved  Coal 8.5 Lignite Class A 8.4 Lignite Class A + 124% Changes due to
revised geological
model and Resource
boundary radii.
Probable Coal 1.5 Lignite Class A 1.5 Lignite Class A - 79%
Total Coal 10.0 Lignite Class A 9.9 Lignite Class A - 10%
Resources 3 & 5
Measured Coal 13.8 Lignite Class A 13.6 Lignite Class A + 188% Changes due to
revised geological
model and Resource
boundary radii.
Indicated Coal 10.2 Lignite Class A 10.1 Lignite Class A - 25%
Inferred Coal 10.9 Lignite Class A 10.8 Lignite Class A - 51%
Total Coal 34.9 Lignite Class A 34.5  Lignite Class A - 14%

1 License refers to BEK Production Operation IUP.
2 Previous coal reserves and resources estimates as at 31 December 2015.
3 Resources are inclusive of reserves.
4 The results presented are rounded to reflect the accuracy of the estimates. Minor discrepancies are due to rounding and are not considered material by SMGC.
5 Reserves and resources are reported in accordance with SMGC’ interpretation of the JORC Code 2012 Edition.