Powder River Coal wants to develop mine in crowded PRB market

Titan Holding Group Inc., now known as Powder River Coal Corp., wants to get into the very expensive, large-scale coal production seen in the Powder River Basin, the dominant coal production region in the U.S., announcing March 19 that it is working on development of PRB mining.

Titan said it has changed its business description change to that of a mining and exploration company. At the open of business on Nov. 25, 2011, FINRA announced Titan’s new name of Powder River Coal. As of Jan. 10, the re-named company began trading on the OTCQB under the ticker symbol POWD.

Powder River Coal, not to be confused with Peabody Energy’s (NYSE:BTU) Peabody Powder River Mining LLC, would have a daunting task to develop a PRB mine. This region is dominated by huge mines – Peabody’s North Antelope Rochelle operation and Arch Coal’s (NYSE:ACI) Black Thunder mine each produce over 100 million tons per year – that are mostly owned by well-heeled, major coal producers. These mines can pretty easily ramp up production to meet new market demand while keeping down costs due to economies of scale. Peabody already has its own brand-new mine, School Creek, waiting in the wings for the right market moment. The entry of a small new player onto this crowded stage would be an unusual event, while some in the coal industry would call it an impossible one.

The newly-named Powder River Coal said it entered into a property purchase agreement in July 2011 for a 100% interest in the 640-acre Miller #1 and 1,280-acre Miller #2 coal properties located in Campbell County, Wyo. A review of both the Miller properties’ exploration potential by Dahrouge Geological Consulting determined that significant thicknesses of coal are present within the Felix coal seam and the Wyodak-Anderson coal seam, which is targeted by all current Wyoming PRB coal production. Based on all available data, the Dahrouge review identified nine exploration targets for the properties across the two seams, representing a total estimate of 381.4 million tons of sub-bituminous coal. Potential production from the properties could be transported domestically via the BNSF Railway, which has a line that lies roughly 12 miles to the east.

The company has appointed Andy Grant as President, CEO, Director, Treasurer and Secretary of the company effective immediately. Brian Kistler has resigned  as Titan’s President, CEO, Director, Treasurer and Secretary effective immediately.

“Mr. Grant has worked as a senior manager for numerous global blue chip companies, and most recently worked as an independent business consultant,” said a June 2011 Form 8-K report filed by the company at the SEC. “From 2001 to 2006, Mr. Grant worked in a number of roles for Unilever including European IT Procurement Manager, during which time he worked on, and program-managed multi-million dollar projects; managed project communications and key stakeholders; controlled large teams of resources; and negotiated and owned major supplier contracts and relationships. From 2006 to 2008, Mr. Grant worked for IBM as a Global Category Manager as part of their Global Strategic Sourcing Account Team, negotiating global purchases and contracts in excess of $40,000,000. From 2008 to 2010, Mr. Grant served as a Third Party Service Delivery and Procurement Manager for a UK law firm, Addleshaw Goddard, where he led a major outsource program on behalf of the firm. From 2010 through the present, he has worked as an independent business consultant in addition to developing his property business which he has operated since 2003.”

“I’m excited to have the privilege of leading Powder River Coal into a new phase of company growth and development,” said Grant in the March 19 statement. “I have a very positive outlook on the opportunities and challenges that lay ahead as we forge a fresh direction based on achievable and profitable goals. In particular, we’re very fortunate to have the Miller Properties as our initial portfolio acquisitions. With these properties, we’re in the ideal region in terms of proven coal resources and infrastructure while being surrounded by the coal industry’s dream team of players. Now we can proceed with building on the historic exploration and development on the properties.”

Based on geophysical logs for 16 drill holes completed at the Miller #1 property, Miller and Associates LLC estimated the thickness of the Wyodak-Anderson coal bed at 69 to 92 feet, at depths generally exceeding 725 feet, said the company. The Dahrouge technical report concluded the Miller #1 property represents potential to host significant amounts of coal, similar to other coal occurrences throughout the PRB. Meanwhile, historic exploration of the properties and geophysical logs also confirm the presence of up to seven coal seams within 1,250 feet of surface for both the Miller #1 and Miller #2 coal properties.

The September 2010 Dahrouge review concluded that an exploration program is warranted and recommended to test the regional significance of the Felix and Wyodak-Anderson coal seams while advancing the properties towards a National Instrument 43-101-compliant coal resource.

About Barry Cassell 20414 Articles
Barry Cassell is Chief Analyst for GenerationHub covering coal and emission controls issues, projects and policy. He has covered the coal and power generation industry for more than 24 years, beginning in November 2011 at GenerationHub and prior to that as editor of SNL Energy’s Coal Report. He was formerly with Coal Outlook for 15 years as the publication’s editor and contributing writer, and prior to that he was editor of Coal & Synfuels Technology and associate editor of The Energy Report. He has a bachelor’s degree from Central Michigan University.