Canada-listed Novadx Ventures (TSX VENTURE:NDX) said March 1 that independent data verification and evaluation has proved the resources and reserve potential of the Rex coal seam at the company’s new Rex No. 1 deep mine located in Campbell County, Tenn.
The evaluation was conducted under the supervision of John Feddock of mining consultant Marshall Miller & Associates and followed guidelines established for coal properties under Canadian National Instrument 43-101 reporting standards. The purpose of the evaluation was to verify previously reported resources and assist the company in developing its longer term mine plans at the Rex No. 1 mine.
In December 2010, in connection with the then-pending completion of the acquisition of Tiacme LLC and the Rex No. 1 mine, the company filed in Canada a NI-43-101 technical report for the property prepared by Gress Engineering PC of Bluefield, Va. The Gress report was premised on the Rex No. 1 property covering about 31,000 acres. Estimated resource and potential reserves reported in the Gress report were based on about 14,000 acres of the controlled acres. That acquisition of Tiacme and Rex No. 1 was completed in January 2011.
Following a comprehensive examination of the mining leases comprising the Rex property, it was determined that the company currently controls mining rights covering about 27,000 acres. Based upon the adjusted controlled acreage, the evaluation assessed the measured and indicated resource potential of about 1,400 acres in the area where the company has established its existing underground mining activities at Rex No. 1, and about 7,600 acres where it intends to conduct future underground mining. The data verification confirmed the existing grade and quality of the Rex seam.
Compared to the Gress report, measured and indicated resources have increased by 18% to 38.1 million tons. Inferred resources decreased from 25.7 million tons to 9.6 million tons due to reclassification of about 6 million tons into the measured and indicated categories and the balance due to the reassessment and reduction of the acreage currently controlled by the company. Compared to the Gress report, proven and probable reserve estimates declined 25% to 11.3 million tons.
Based on Novadx’s current plans, the current proven and probable reserves estimates support over a 20-year expected mine life and the company intends to continue to add reserves through further drilling and property acquisition. As a result of the verified technical information contained in the evaluation, the company considers the entire Gress report to be outdated and has engaged Marshall Miller & Associates to complete a further detailed study of Rex No. 1’s coal resources and reserves, geology and mine plans, and to prepare an updated technical report in compliance with NI 43-101.
Novadx is a Vancouver-based mining investment company that is working on coal mining opportunities in Appalachia. Rex No. 1 has been listed since 1981 in the U.S. Mine Safety and Health Administration database under various companies, with a transfer of the registration in March 2011 from Rex Mining, which had held it since 1986, to Tiacme LLC. The mine went into production in the third quarter of 2011 and turned out 1,948 tons during the rest of the year, MSHA data shows.
The state of Tennessee doesn’t produce much coal, but the remaining thin-seam coal reserves there have gotten some extra attention lately from Novadx and parties like coal operator Jim Justice, because the better reserves are depleting in the rest of Central and Southern Appalachia.