CanAm Coal Corporation announced on the issuance of a mining permit for the Old Union II mine and the acquisition of new coal leases.
Old Union II Permit;
The Company's subsidiary, Birmingham Coal & Coke was issued permit 3962 by the Alabama Surface Mining Commission. This permit, also known as the Old Union II permit, allows the Company to start mining operations effective immediately. The Old Union II permit is 5 year surface mining permit covering a total of 1,393 acres and 1,108 minable acres. The total recoverable tonnes of coal within the permit area are 1,274,750 tonnes. The Company has begun the mine development work and is targeting a September 2012 production startup. Annual production from the Old Union properties, which include the existing Old Union and the now permitted Old Union II mine sites, is forecasted at 360,000 tonnes to 400,000 tonnes per annum. To put this in context, Old Union mine production for the first 6 months of 2012 was approximately 110,000 tonnes.
The coal within the Old Union II mine complex is considered to have the same qualities and characteristics as the coal that is currently being mined from the existing Old Union mine. On average, the proximate analysis has indicated 9% ash, 1.0% sulfur and 12,400 BTU per lb. These average values are consistent with the assays reported from drilling; mine face sampling and product deliveries.
New Coal Leases;
The Company is also pleased to report that BCC has acquired additional surface mining rights to two tracts of land totaling approximately 133 acres. These lands are an integral part of the Old Union and Old Union II mine complex and are in addition to the 574 acres of land acquired in the period April to June 2012 and previously announced in a press release dated July 10th 2012.
The first of the surface mining rights was acquired through Molag Timberprop, LLC through a surface mining lease. The lease consists of approximately 40 total acres with a management estimate of 23 mineable acres. The lease has a 3 year term and includes industry standard royalty provisions with no advance minimum royalties. This property is currently permitted and is within the Old Union mining complex.
The second surface mining lease is referred to by the company as the H.H. and Alice Kilgore property and will be added to the Old Union II mine permit. It consists of approximately 93 total acres with a management estimate of 64 mineable acres. The lease has an indefinite term that runs until the mining and reclamation are completed and includes industry standard royalty provisions with no advance minimum royalties. This is a key lease acquisition as, from a mine development and operating perspective, this property will allow for direct and easy access to the eastern portion of the Old Union II mine site from County Road 21.
Mr Tom Lewis VP of BCC said that "We are excited about our new Old Union II permit as it will allows us to expand our mining operations, increase our production of high quality thermal coal and continue to meet our customer commitments. In addition, the acquisition of the Kilgore property will save us time and money as we avoid having to undertake a major bridge project."
Source - CanAm Coal Corporation
(www.coalguru.com)
