Universal Bioenergy Inc. (OTC Markets: UBRG) said Aug. 28 that it is making sales of commercial coal from the Whitesburg Friday Branch mine (WFBM) in Whitesburg, Ky., and has begun generating revenue.
The company is forecasting that the sales of coal could generate an estimated average of $52.8m in revenues and an estimated $5m to $8m in earnings annually. The Whitesburg Friday Branch mine is a producer and provider of thermal steam coal. The operation currently has over 3 million tons of recoverable coal under contract in the Elkhorn No. 3 seam in Letcher County, Ky.
“WFBM has opened up the left side of increment No. 1 to begin the augering process, as well as opening increment No. 6,” said the company. “State Inspectors have required that WFBM add a pond on increment No. 6, prior to any additional mining on that increment. WFBM management is working to have the pond finished as quickly as possible and certified by its engineers. Once the pond is complete WFBM will be able to rotate the present auger equipment between the left side and increment No. 6. In addition, WFBM bonded increment No. 4, and should have that section opened for the second auger unit. The mining plans include building the bench up 10 feet, which will allow getting the auger unit in place. Once that is complete, this will allow WFBM to get a total of 2 auger units working and achieve the tonnage quantities per the mining production forecasts. WFBM management is carefully tracking the supply, demand and prices of coal which directly impacts the production rate of the mining operations.”
The company is in negotiations with other land owners for the property adjacent to the mine, to obtain coal mineral leases surrounding the property, in an effort to add to the revised highwall mining permit. WFBM management is working toward a November target date for completion of the highwall revision to the permit. Engaging the services of a highwall mining contractor could significantly increase the operations, production and the revenues from the sales of coal, the company added.
Universal Senior Vice President Solomon Ali said: “We are very excited about the revenues that have started to be generated from the Whitesburg coal mine, in the second quarter as we projected. The exceptionally hot weather for the summer months has caused an increased demand for electricity for coal fired power plants, due to the increased need for air conditioning. We believe we should begin to generate some potential earnings toward the fourth quarter this year. Based on the financial forecasts from Whitesburg’s management, the mine is projected to generate an estimated $264 million in revenues during the next 5 years, or an average of $52.80 million per year. The Company has some other major announcements forthcoming about some other accomplishments we are completing that we believe will have a positive affect on our shareholders.”
On Feb. 28, the company announced that it closed the transaction for the acquisition of a 40% stake in Whitesburg Friday Branch Mine LLC, a producer and provider of thermal steam coal in eastern Kentucky. Listed with the U.S. Mine Safety and Health Administration under Whitesburg Friday Branch Mine LLC is a surface job called Friday Branch 1, located in Letcher County.