Australia’s Attila Resources Ltd. (ASX: AYA, AYAO) said June 25 that it has raised the A$14m needed to finance the acquisition of 70% of the shut Kodiak hard coking coal deep mine in Shelby County, Ala.
Attila said it hopes to complete due diligence and close the Kodiak buy on or around June 27.
Kodiak is a mine once operated by Walter Energy (NYSE: WLT). Attila had announced on May 22 that it would acquire 70% of the operation, with the other 30% held by a company controlled by former Cyrpus Amax Coal head Don Brown. Attila said that a Brown company, TBL Metallurgical Resources LLC, has an option with Walter Minerals, a unit of Walter Energy, to buy the Coke No. 1 mine and related assets. Attila has entered into an option deal with Brown for 70% of Kodiak Mining Co. LLC, the Walter company that controls these assets.
Brown and TBL would be the other major partner in this project and provide management services for the project, Attila said. TBL will retain 20% of the project, with the other 10% to be possibly be held by various parties, including Konkera Pty Ltd.
Coke No. 1 produces a high-vol coking coal and was shut in 2008 due to underperformance by mining contractors and inadequate mine ventilation, said Attila. A consultant hired by Attila, Stagg Resource Consultants, estimates an exploration target at the mine of 80 million to 100 million tonnes of coal.
Attila would get the rights to two coal seams on the property, the Atkins and Coke, which average 0.9 meters to 3 meters in thickness within the property. The purchase from Walter would include the mine, mining equipment on-site and infrastructure including a 300 tonnes per hour prep plant.
TBL has also entered into an agreement to lease the underground mining rights to the Atkins and Coke coal seams on an approximate 7,770-acre property from RGGS Land & Minerals, which previously leased the underground mining rights to Kodiak Mining when it operated the Coke No. 1 mine.
The “temporarily idled” prep plant is currently listed with the U.S. Mine Safety and Health Administration as the Kodiak #1 plant of Kodiak Mining. The Coke No. 1 mine is listed with MSHA as “abandoned,” with last production in 2008 (69,487 tons produced that year), with 95,336 tons produced in 2007.