Colombia Energy Resources (OTCBB: CERX), a U.S.-based metallurgical coal exploration and production company operating in Colombia, on April 5 released the initial independent resource report on its Ruku Mining Complex.
“The completion of our first compliant resource report is a major milestone for CERX,” said company CEO Ronald Stovash. “In addition to providing our shareholders with more information on our coal qualities and quantities, it also represents a critical step toward a dual listing in Canada later this year.”
The Ruku Mining Complex is located near the village of San Pedro in the municipality of Socota, a provincial department of Boyaca, Colombia. The total area of the Ruku project is made up of four adjacent coal mining concessions totaling about 91 hectares (226 acres), one of which has been producing metallurgical coal for nearly 18 years.
After acquiring the Ruku complex last year, CERX temporarily closed the mine to improve safety and operating conditions. The mine was brought back into production in December and was producing 1,800 tons of coal per month until February, when operations were stopped due to vandalism. Management expects production at the mine to restart within 30 days.
Coal produced from Ruku is a high-quality, low-vol coal with typical quality characteristics of about 19% volatile matter, 6.5% ash, 4% moisture, less than 1% sulfur and 14,000 Btu/lb. The resource report states that Ruku has in excess of 4 million tonnes of coal, with measured and indicated resources of 2.4 million tonnes, and 1.8 million tonnes inferred.
“The report demonstrates we have enough coal for a minimum of 25 year mine life at our intended production levels,” said Carlos Soto, president of CERX’s wholly owned subsidiary, Colombia Clean Power SAS. “We expect to eventually drill three cored holes to prove up additional resources and will update our resource report accordingly.”
CERX currently controls more than 25,000 acres in four distinct blocks in Colombia. Ruku is the smallest of the four blocks, and is expected to eventually contribute a smaller amount of overall met coal production relative to the larger Otanche and Boavita blocks.
The company has retained consulting firm John T. Boyd to review the National Instrument 43-101 report as well as conduct resource analysis on other company controlled properties. CERX expects the initial resource reports on its Boyaca properties to be completed later this year.
“Supported by this new report on Ruku, and the anticipated report from J.T. Boyd on our other controlled properties, we remain committed to our long term goal of producing 1 million tons per annum by 2015,” added Stovash.
CERX said it plans to import international mining best practices to Colombia as it becomes a leading consolidator in the Colombian met coal market. CERX’s team of executives, advisors and partners is made up of experienced entrepreneurs and business professionals in the U.S. and Colombia with experience in coal mining as well as substantial industry relationships.
On the board of directors of the company is Pete Lilly, a former top executive at coal producers like CONSOL Energy (NYSE: CNX) and Peabody Energy (NYSE: BTU). Barry Markowitz, Chairman of the Board, has past coal experience at DTE Energy (NYSE: DTE). Another board member is James Wolff of Colorado coal producer Bowie Resources LLC and formerly with companies like U.S. Coal. Stovash himself is a veteran of CONSOL Energy and PinnOak Resources.