Novadx Ventures (TSX VENTURE: NDX) said April 19 that it has filed a new technical report with Canadian regulators on its newly-revived Rex underground coal mine in Campbell County, Tenn., run by its MCoal Corp. subsidiary.
The report was written by John Feddock, Paul Sainato and Hugo Fournier of consulting firm Marshall Miller & Associates (MM&A). In the Rex seam, the report shows measured in situ resources of 10.1 million tons, with 28 million tons indicated and 9.6 million tons inferred. Recoverable reserves stand at 3.4 million tons proven and 7.9 million tons probable.
The company controls approximately 27,000 contiguous and non-contiguous acres of mineral rights divided into the Rex property (21,170 acres) and the North Campbell property (5,840 acres). The 2012 Technical Report focused on the property and the stated resources and reserves were estimated for the company’s active Rex No. 1 Mine (1,615 acres) and the Proposed Rex No. 2 Mine (5,000 acres) within the Rex property.
The 2012 Technical Report also includes a positive economic assessment of the Rex project as currently planned. That includes 11.3 million tons of recoverable coal, 23 years of mine life, average annual marketable production of 592,000 tons, an average coal sales price of $170/ton and average cash production cost of $121/ton.
The economic assessment of the Rex project was prepared using demonstrated reserves on an after U.S. tax basis assuming the project was developed by an independent third party, and therefore did not include allowances for the company’s coal production payment agreements with Sandstorm Metals & Energy Ltd. announced in November 2010.
“We are pleased with the results of this technical report and quality of work that MM&A has completed,” said Neil MacDonald, President and CEO of Novadx. “The positive economic assessment greatly improves our confidence in the Rex Coal Mine Project and we remain firmly committed to seeing the project through to positive cash flow. We are also committed to potentially increasing our reserves through further exploration of our existing property, and acquisition of adjacent properties as recommended in the report.”
Novadx announced Feb. 9 that development at Rex No. 1 is nearing completion and that raw coal shipments have started to two customers on a trial basis. The company said at the time that it has established three operating faces and is now continuously mining raw coal on a single shift per day basis, in addition to rehabilitating the original mine airways. Operating so far is a continuous miner and related equipment with a beltline to transport mined coal to the surface.
Novadx is a Vancouver-based mining investment company. Through its wholly owned subsidiary, Novadx’s primary focus is to invest its capital to acquire and develop companies with active or near production high quality coal reserves in the Appalachia coal region. Novadx said it is actively evaluating a number of high quality coal acquisition opportunities. MCoal operates the Rosa coal mine in Blount County, Ala., and is developing the Rex No. 1 mine in Tennessee.