Full text of the announcement by Australian energy company ASX: BLK regarding cooperation with Zhongke Synthetic Oil

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This post was last edited by jordan569 on 2013-1-6 at 21:58. BLACKHAM SIGNS AGREEMENT WITH SYNFUELS CHINA FOR DEVELOPMENT OF COAL TO LIQUID FACILITY IN WESTERN AUSTRALIA Australian energy company Blackham Resources Limited (ASX: BLK) (“Blackham” or “the Company”) has reached a significant milestone in the development of its Scaddan and Zanthus Energy Projects in Western Australia, confirming today that it has signed an agreement with Synfuels China Co. Ltd (“Synfuels China”) regarding the establishment of a Coal-to-Liquids (CTL) Fischer-Tropsch Diesel Facility in the Esperance Region of Western Australia, using Synfuels China’s technology. Under the terms of the non-binding Memorandum of Understanding (MoU), Blackham and Synfuels China have agreed to carry out various technical and project-related evaluation activities over the coming months, with the aim of signing a formal agreement regarding the application of Synfuels China’s technology to the development of the Scaddan project. It is expected that the formal agreement will be finalized by Q2 2010, subject to positive results from the technical and project evaluations conducted by Synfuels China. After those evaluations and the determination of feasibility, Synfuels China will have the priority to negotiate to take on the entire project design for Blackham’s CTL FT Diesel Facility. Once the facility in Esperance is successfully operational, Blackham and Synfuels China will establish a viable commercial cooperation model to facilitate the rapid industrialization of Synfuels China’s technology in Australia. Brett Smith, Blackham’s Chairman, said, “Coal-to-liquids development in China is progressing at a rapid pace, faster than in any other country in the world. Blackham is enthusiastic about its partnership with Synfuels China and looks forward to working closely with one of the world’s leading companies in CTL engineering and technology to develop the facility in Esperance.” He added, “Blackham intends to dry the lignite to a level suitable for use in gasifiers before proceeding with gasification. The innovative drying technology developed by Synfuels China is of great interest to us.” Synfuels China is recognized as a global leader in CTL project development, having conducted extensive research and development in this field. It has also gained production experience through the operation of the Ordos plant belonging to Inner Mongolia Yitai Group Co. Ltd., as well as the Shan* demonstration plants operated by the Luan Group; both of these plants are currently producing 4,000 barrels per day. Synfuels China’s technology will also be utilized in Shenhua Group Co. Ltd.’s FT CTL plant in Ordos, Inner Mongolia, which has a capacity of 4,000 barrels per day. All three of these demonstration plants are scheduled to be expanded to a capacity of over 120,000 barrels per day within 12 months. Before entering into the MoU, Synfuels China analyzed the lignite samples from the Scaddan and Zanthus Energy Projects. Blackham will now supply these samples to Synfuels China for testing and evaluation. The samples were obtained using sonic drilling methods to minimize contamination, and Blackham is confident that they represent accurately the material from the middle part of the deposit where mining will take place. Synfuels China will analyze these lignite samples to determine their suitability as feedstock for its CTL technologies. Synfuels China’s technologies include its own innovative drying methods, Fischer-Tropsch Slurry (FTS) catalysts, slurry reactors, processes for upgrading the resulting products, and technologies to improve the efficiency of the CTL process. Blackham is considering developing the Scaddan and Zanthus Energy Projects into Australia’s leading CTL FT Diesel Facility. According to the JORC Code, Blackham currently holds reserves of lignite totaling over 1.11 billion tonnes. More detailed information on Blackham’s lignite resources can be found in its quarterly report for September 2009. Blackham’s attributable resources, taking into account its 70% stake in the Scaddan lignite deposit and 100% ownership of the Zanthus deposit, amount to 880 million tonnes of lignite. Project Resource (million tonnes) Blackham Share Scaddan Energy JV – indicated 70% 330 230 Scaddan Energy JV – inferred 70% 430 300 Zanthus deposit – inferred 100% 350 350 Total Resource 1,110 880 Potential barrels of oil products* 550 million barrels 440 million barrels * Scoping studies for the Scaddan Energy project indicate that 0.49 to 0.64 barrels of oil products can be produced per wet tonne of lignite. This figure will be confirmed through further testing during the feasibility study. There is also potential for additional production from existing coal reserves, with estimates suggesting that there are 780 million to 1.16 billion tonnes of lignite available at the Scaddan and Zanthus projects. The scoping study completed in November 2008 assumed a production capacity of 15,000 barrels per day, resulting in an annual output of 4.8 million barrels. With the current resources, it is possible to scale up production to a world-class level of 45,000 barrels per day, or 14 million barrels per year, with enough feedstock to last for over 35 years. For more information about Blackham, please contact: Bryan Dixon, David Tasker/Melanie Gray, Managing Director, Blackham Resources Limited, Professional Public Relations. Tel: +618 9388 2967, +618 9388 0944, +61 433 112 936. Email: david.tasker@ppr.com.au $ $