Canada-based Maxim Power Corp. (TSX:MXG) said May 9 that subsidiary Summit Coal Inc. has entered into an agreement to acquire an additional coal lease for its Mine 14 coal project in Alberta.
The new lease covers 1,328 hectares and is contiguous to SUMMIT’s existing Mine 14 coal leases. Upon closing of this acquisition, SUMMIT’s lease holdings will increase 25% to 6,669 hectares. The transaction is subject to customary closing conditions.
SUMMIT issued a recent technical report for its Mine 14 metallurgical coal project. This report excludes potential resources and reserves associated with this new lease and the two leases recently acquired in the Alberta government’s public offering of Crown coal rights on May 2.
SUMMIT intends to carry out an exploration program during 2012 to identify additional resources and reserves on both its existing and recently-acquired leases. Upon the completion of this program, SUMMIT intends to issue a further updated technical report.
The recent technical report, from consultant Golder Associates, outlined measured and indicated resources of 119.3 million tonnes, reflecting a 359% increase over those reported in 2005, and inferred resources of 154 million tonnes. Proven and probable reserves, which are included in the resource estimate, are 18.7 million tonnes, representing an increase of 40%. As a result, the estimated mine life of Mine 14 has been increased from 10 years to 14.4 years based on the currently planned mining program.
The Golder report said that the underground-minable reserves at Mine 14 are in the No. 10 and the No. 4, with those seams containing a low- to mid-vol metallurgical coal. There are surface-minable reserves on the property, but “environmental constraints” would keep those from being mined, the report noted. Summit Coal is preparing to permit a coal prep plant for this operation that would be located at Maxim’s nearby Milner power plant. Maxim has said this coal is an alternate supply for the coal-fired Milner plant, as well as a coal that could be sold on the met market. The plan calls for up to 1.3 million tonnes per year of production from Mine 14, with this being a room-and-pillar mine with secondary pillar extraction.
Based in Calgary, Alberta, MAXIM is an independent power producer, which acquires or develops, owns and operates innovative and environmentally responsible power and power related projects. MAXIM currently owns and operates 40 power plants in western Canada, the U.S. and France, having 788 MW of electric and 111 MW of thermal net generating capacity.