American Power gets resource study on Montana coal reserve

American Power Corp. (OTCBB: AMPW) said Sept. 21 that it has completed a Reserve and Resource Study prepared by consultant Weir International Inc. for the Pace Coal Project in Montana.

“We are extremely pleased with the results of the study, which demonstrate the relevance of the Pace Coal project in Judith Basin County, Montana,” said Al Valencia, CEO of American Power. “Delineating coal reserves for the Pace Coal project is an important milestone for us. With total proven and probable reserves of 55.5 million tons and inferred resources of 20.4 million tons on the designated resource area controlled by the Company, the Pace Coal project is well positioned to become a substantial coal mining operation in the region.”

In developing its study, Weir designated a large resource area that also included uncontrolled properties, mostly federal and state coal lands. Weir developed the study around the central core of American Power’s properties which involves less than 50% of the approximately 29,000 acres of coal which the company holds.

The study states that “further drilling on the Pace Property has the potential to expand reserve and resource area to the northeast, east and southeast of the designated reserve and resource study area,” and that “coal reserves and resources underlie the majority of the property.”

The company expects to release the results of the Mine Feasibility Study for the Pace Coal project in due course.

Geological data obtained to date shows that the coal seam thickness reaches up to 14.5 feet and averages 8.47 feet on the property. Thirty-eight drill holes were used to model the coal seam, with 20 holes drilled by Mobil in 1979 and 18 holes drilled by American Power in 2011.

Coal specs (dry basis) from the samples in nine new holes drilled in 2011 included 37.57% ash, 3.55% sulfur and 7,958 Btu/lb. Float/sink analysis of the samples from four of those holes, which basically shows specs after the coal would be cleaned in a prep plant, came in on a dry basis at 12.66% ash, 2.28% sulfur and 11,748 Btu/lb.

Additional drilling and coal core analysis are required to better define the coal quality on the Pace Coal property, the company noted. The reserve and resource estimates are based on encountering favorable mining conditions and do not account for any unforeseen adverse mining conditions.

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.