Thelon Capital Ltd., which has stock listed in Canada, has extended the deadline under an agreement dating back to 2010 to acquire the Jellico coal property in Tennessee to April 15.
In May 2010, the Thelon entered into a letter of agreement to acquire 100% of the Jellico property, which consists of approximately 6,000 acres of coal mineral and surface rights in Campbell and Clairborne counties. The company then entered into a share purchase agreement in December 2010, which was amended twice in 2011, to purchase 100% of the issued and outstanding shares of Clear Fork Mining Co., which owns 100% of the Jellico property.
“The property and surrounding area has well-established power, logistics, and transportation infrastructure including mine access roads, several secondary county roads, and a railroad parallel to Tennessee State Highway 90, which extends through the property,” Thelon noted in a March 26 financial report filed in Canada. “Portions of the property have had extensive sampling and drilling by previous operators as recently as 2009, and it is thought to contain multiple coal seams of high quality metallurgical, as well as, compliant steam coals. DRC Coal LLC has a surface mining operation on the southern boundary of the property producing from the Blue Gem, Jellico, and Rex coal seams.”
Historical reserve and coal analysis data provided in a July 2009 report showed inferred coal reserves of approximately 12 million tons in place. Coal quality analysis conducted from core holes and test pits on the property between 1992 and 2007 have shown favorable sulfur, ash, and Btu values consistent with high quality metallurgical coals being produced in the area. This historical information, by the way, is not National Instrument 43-101 compliant. That is a standard that public companies in Canada need to adhere to when talking about mineral reserves.
Thelon’s immediate objectives are to close the transaction, begin the necessary drilling to define additional coal reserves and complete a National Instrument 43-101 report of measured and indicated mineable coal reserves on the property. “The closing date has been extended to April 15, 2012,” the financial report said.
DRC Coal LLC has no operations registered with the U.S. Mine Safety and Health Administration. There is a Williamsburg, Ky.-based DRC Coal LLC listed with the U.S. Office of Surface Mining that is 100% owned by Danny Chambers. OSM shows DRC Coal with a permitted White Oak surface mine in Campbell County, Tenn., with that permit issued in May 2009. The OSM and MSHA records show that White Oak is actually listed with MSHA under the Mountainside Coal Inc. operation of Chambers.
There is no MSHA or OSM listing for Clear Fork Mining Co.