Here's a new one to watch. I'm familiar with the operations people. Came over here from Peabody and Alliance Resources. Good mining crew. Don't know much about the company, though. It's traded on the Toronto Stock Exchange.
Friday, March 27, 2009
Phoenix Coal Inc. acquires Petersburg Coal reserve
LOUISVILLE, KY, Mar 27, 2009 (Canada NewsWire via COMTEX) ----Phoenix Coal Inc. (TSX: PHC: 0.74, -0.01, -1.33%) ("Phoenix" or "the Company"), a leading producer and consolidator of thermal coal mineral reserves in the Illinois Basin, announced today it has entered into a sublease agreement with Petersburg Coal, LLC ("Petersburg"). The subleased mineral reserves are contiguous to Phoenix's Gryphon Mining Complex, formerly known as the Pratt Mine. All mineral reserve and mineral resource quantities are assumed to be quoted in imperial (short) tons.
"With the sublease, Phoenix now controls over 40 million tons of underground reserves within the Gryphon Mining Complex," said David A. Wiley, President and CEO of Phoenix Coal. "In addition to the new reserves, Phoenix will have access to an alternative portal location capable of supporting efficient surface logistics and access to transportation routes, including rail, which will significantly increase the number of customers to which we can economically ship coal. The addition of Petersburg expands a project that is an important component of Phoenix Coal's growth plan and enhances the strategic value of our entire asset base."
Under the terms of the agreement, Phoenix will pay US$3 million at closing and an additional US$3 million upon satisfactory completion of certain contingencies, including receipt of all required permits. Phoenix's total royalty rate for coal sold from the Gryphon Mining Complex shall be 6% of gross sales price.
In addition to the estimated coal reserves contained within the Gryphon Mining Complex, Phoenix also controls 76 million tons of coal mineral resource at its Panama South Property as of December 31, 2007. Both the Gryphon Mining Complex and Panama South are located in Webster and Henderson Counties in Western Kentucky. The Company expects this region will serve as the hub for its future underground mining operations.
A preliminary estimate of the coal mineral reserve contained in the Gryphon Mining Complex was calculated as of March 25, 2009 by Marshall Miller & Associates, Inc. ("MM&A"), an independent geological and engineering consulting firm headquartered in Bluefield, Virginia. MM&A has provided project feasibility studies and related engineering and geological services at coal projects and mines worldwide since 1977. MM&A estimates that the Gryphon Mining Complex contains a proven and probable mineral reserve of approximately 43 million tons of thermal grade bituminous coal, located on approximately 10,000 acres. The mineral reserve at the Gryphon Mining Complex is underground proven and probable reserves in the Western Kentucky No. 9 coal seam. In order to calculate the quantity of the mineral reserve at the Gryphon Mining Complex, MM&A utilized exploration drilling logs and property control maps provided by Phoenix and Petersburg and public domain data from the Kentucky Geological Survey. The Petersburg property was not included in the mining plan and financial analysis developed for the NI 43-101, dated March 10, 2008. All of the requirements of the technical report relating to the Gryphon Mining Complex, including the Petersburg property, will be fulfilled when the NI 43-101 is updated.
The Company retained George J. Oberlick, P. Eng., J. Scott Nelson C.P.G. and Gerard J. Enigk, P. Eng. of MM&A to prepare the NI 43-101 technical report in respect of the Gryphon Mining Complex. Each of Messrs. Oberlick, Nelson and Enigk is a "qualified person" as defined in NI 43-101. The Company anticipates filing the updated NI 43-101 technical report on SEDAR within 45 days. The preliminary technical information contained in this Press Release relating to the above mineral resource and mineral reserve estimates is reported and verified by George J. Oberlick, P. Eng. of MM&A, who is a "qualified person" as defined in NI 43-101.
About Phoenix Coal Inc.
Phoenix Coal Inc. is an integrated mining company producing high sulphur, low chlorine, bituminous coal from the Illinois Basin. To address the increasing demand for energy in the Eastern United States as well as in the export market, Phoenix Coal is pursuing production growth through the focused acquisition, consolidation, and extraction of coal assets. Phoenix Coal currently operates surface coal mines in Muhlenberg County, Kentucky and a barge loading facility on the Green River. Development plans for additional surface operations, as well as an underground mine, are underway. The Company's executive offices are located in Louisville, KY and its operational headquarters are stationed in Madisonville, KY. For additional information, visit www.phxcoal.com
AI
