Maxim Power Corp. (TSX:MXG) said May 3 that wholly owned subsidiary Summit Coal Inc. has issued an updated technical report for its Mine 14 (metallurgical coal) project under Canadian National Instrument 43-101 standards.
The report, from consultant Golder Associates, outlines 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.
Maxim also announced that Summit was awarded on May 2 two coal leases for a total of 2,560 hectares in the Alberta government’s public offering of Crown coal rights. One of these leases of 768 hectares is immediately adjacent to Maxim’s existing Mine 14 coal leases. The second lease of 1,792 hectares is located northwest of leases owned by Grande Cache Coal Corp., a major met coal producer in this region. The addition of these leases increases the coal lease holdings of Summit by 92% to 5,341 hectares. The new technical report excludes potential resources and reserves associated with these new leases.
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 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 a room-and-pillar mine with secondary pillar extraction.
A bid summary sheet from the Alberta Department of Energy for the May 2 coal lease sales shows winning bids from parties including Summit Coal, Mancal Coal, Coal Valley Resources (which is a unit of Sherritt), Canadian Dehua International Mines Group and Grande Cache Coal.
Based in Calgary, Alberta, Maxim is an independent power producer that 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.