It is reported that US focused coal miner Atlantic Coal has signed an option on a prospect in Pennsylvania that could double its anthracite reserves.

The lease option with Pennsylvania-based Reading Anthracite Company is for a permitted 410 acre site 25 miles from Atlantic’s Stockton site and which also contains the Mammoth Seam that is being mined at Stockton.

Atlantic estimates the new site contains 12 million tons of Run of Mine coal with 4.1 million tons of clean coal. Subject to due diligence, Atlantic will pay USD 6 million in cash and shares to RAC and grant it USD 3 million worth of warrants at 0.75 pence per share.

Atlantic said that as well as developing its strategy of increasing its current reserves and production profile in the Pennsylvania Anthracitic Belt, the deal also has the potential to build a commercial relationship with RAC which has been operating in the area for 135 years.

The site is also in close proximity to major east-coast transportation hubs, it added.

Mr Steve Best Atlantic Coal managing director said "We are extremely pleased to have been able to secure an option on this major site. This agreement is in line with our growth strategy of expanding our regional footprint in this prime anthracite region, which has excellent infrastructure and established demand, and building Atlantic Coal into a major anthracite producer in the USA.

Under the terms of the lease, RAC can buy all of the raw coal produced at the prospect until Atlantic builds a processing plant and up to 50% thereafter.

(Sourced from www.proactiveinvestors.co.uk)