CanAm Coal acquires new reserves for Old Union job in Alabama

CanAm Coal (TSX VENTURE: COE) (OTCQX: COECF) said July 10 that between April 1 and June 30, its 50% owned affiliate Birmingham Coal & Coke acquired the mineral and surface mining rights under a “fee simple” arrangement of three properties totaling 574 acres.

These Alabama coal properties are adjacent to the Old Union mine and are an integral part of the Old Union 2 mine complex that is currently being permitted.

  • The first of the fee simple mining rights was acquired from the Alabama Department of Conservation and Natural Resources through a competitive bid process. The lease was described by the state in the public notification process as follows; “containing 324 acres, more or less, with 214.49 mineable acres, more or less as reflected on a map available from the state land division. The estimated recoverable reserve quantity is 401,525.28 tons of coal.” The state lease is for a term of five years.
  • The second fee simple property is referred to by the company as the Baccus property and is adjacent to the state property and the Old Union mining complex. It consists of 170 acres in total with a management estimate of 121 minable acres. The lease has an indefinite term that runs until mining and reclamation are completed.
  • The third fee simple property is another state lease totaling 80 acres with 28 acres of minable land. This lease was also obtained through a competitive bid process and has a term of five year.

All properties have been partially permitted by Birmingham Coal & Coke prior to the acquisition of the fee simple mining rights and the company is not anticipating any issues in the completion of the permits. The coal on each of these properties is considered to have the same qualities/characteristics as the coal that is currently being mined from the Old Union mine. On average, the proximate analysis has indicated 9% ash, 1% sulfur and 12,400 Btu/lb. These average values are consistent with the assays reported from drilling, mine face sampling and product deliveries.

“The acquisition of additional coal leases that are within or adjacent to our current mines is an integral part of our growth story,” said Tim Bergen, CEO of CanAm. “In addition, we believe that these lands hold good quality coals that fit well within our product portfolio and are in demand by our customers.”

U.S. Mine Safety and Health Administration data shows that Birmingham Coal & Coke’s Old Union strip mine in Winston County produced 61,104 tons in the first quarter of this year and 248,368 tons in all of 2011.

About Barry Cassell 20414 Articles
Barry Cassell is Chief Analyst for GenerationHub covering coal and emission controls issues, projects and policy. He has covered the coal and power generation industry for more than 24 years, beginning in November 2011 at GenerationHub and prior to that as editor of SNL Energy’s Coal Report. He was formerly with Coal Outlook for 15 years as the publication’s editor and contributing writer, and prior to that he was editor of Coal & Synfuels Technology and associate editor of The Energy Report. He has a bachelor’s degree from Central Michigan University.