Canada-listed Royal Coal Corp. (TSX VENTURE:RDA)(FRANKFURT:RLC), which has coal mining operations in eastern Kentucky, announced Jan. 18 that it has obtained a receipt for a preliminary short form prospectus from securities regulators in British Columbia, Alberta, Manitoba and Ontario.
The prospectus covers an offering of units of Royal Coal for gross proceeds of up to C$6.6m. The offering is being conducted on a best efforts agency basis by Cormark Securities Inc. The offering is subject to certain conditions including, but not limited to, the receipt of all necessary approvals, including the approval of the TSX Venture Exchange and other customary closing conditions.
Royal Coal is a relatively new coal exploration and production company, headquartered in Toronto, Canada, with a regional office in Hazard, Ky. Coal production for the company for the three and nine months ended Sept. 30, 2011, was 73,471 tons and 245,496 tons, respectively, and 96,579 tons and 283,509 tons for the same periods in 2010.
On Dec. 28, 2011, Royal Coal announced that it had reached an agreement with Novadx Ventures Corp. (TSX-V:NDX) and the Ikerd Group of Companies under which Royal Coal will contract mine and sell the coal at certain leases held by Novadx and Ikerd in eastern Kentucky. Royal Coal said these operations complement Royal Coal’s existing operations, including the wholly-owned Charlene loadout. Royal Coal commenced initial contract mining operations at the subject Flatwoods mine in November and at the Elk Creek operation in December. Royal Coal’s production target from the combined properties is 40,000-45,000 tons per month by February 2012.
Royal Coal separately announced on Dec. 28 that it has secured coal sales contracts for 234,000 tons to be delivered over a 12-month period commencing January 2012. These contracts provide for the delivery of run-of-mine coal at an average sales price of $85/ton with delivery at the mine site.
The Royal Coal website lists the company’s CEO as Robert Heuler, who has a long background in coal industry investment, including a stint in mergers and acquisitions at Monarch Financial Corp.