It is reported that New Horizon Minerals has entered into a transaction to acquire a thermal coal project in Utah that will potentially transform the company.

The project lies in the Eastern Wasatch Plateau which is within the Uinta Basin Coal Field a mature coal producing region which has historically produced over 30 million tonnes of coal per annum production. The project covers approximately 5,300 acres and is located adjacent to the town of Scofield, Utah approximately 100 miles south east of Salt Lake City.

NHO will acquire 100% of the issued share capital of Delta Coal Fund Pty Ltd from the shareholders of Delta Coal which has entered into an asset purchase agreement with Carbon Resources LLC to acquire a 100% interest in the leasehold and sub‐leasehold land from Carbon Resources known as the Kinney 2 thermal coal project located in Utah USA.

The project is an advanced thermal coal project with an exploration target of 20 to 25 million tonnes and following settlement work will immediately commence on a bankable feasibility study to target production by 2013.

NHO will raise a minimum of USD 10 million and up to USD 15 million via the issue and allotment of the placement shares at a minimum of 20 cents each, with a free attaching option exercisable at 20 cents each on or before 31 December 2014 via a prospectus.

Patersons Securities, Delta Capital and CPS Securities have been appointed as joint lead managers by the company to manage the placement. Following the placement, Delta Coal will pay USD 7 million to Carbon Resources and a deferred consideration of USD 3 million before 1 June 2012. A second deferred payment is due of USD 15 million payable on completion of a bankable feasibility study or a decision to mine.

The project is located near Scofield, Utah which is a significant coal producing region that has historically produced over 30 million tonnes per annum. It is immediately adjacent to all necessary infrastructure including rail and power. Mining permits over the project area were conditionally granted by the State of Utah in June 2011.

Based on available data, the project could produce a premium coal product with the calorific value ranging ranges between 6,400 to 6,780 Kilocalories per Kilogram with estimated 7.0 to 9.5% Ash and 0.59 to 0.9% sulphur.

The company said there is a real opportunity to double the exploration target through the acquisition of adjoining Federal Government land. Interestingly, both export and domestic sales have occurred in the region with multiple ports available for the export market which will be a focus of the bankable feasibility study however a significant local domestic market also exists with 6 coals fired power stations within a 260 kilometre radius of the Project.

(Sourced from www.proactiveinvestors.com.au)