Liberty Coal Energy Corp. (OTCQB: LBTG), which wants to develop coal mining operations in eastern Kentucky, said Oct. 1 that it has closed an equity placement of nearly $9.2m with 10 institutional accredited investors, through its equity advisor Catwalk Capital LLC.
Ed Morrow, CEO of Liberty Coal Energy, said: “This funding provides Liberty Coal the financial capability to complete its plan on the Owsley County, Kentucky coal property and to make additional acquisitions to grow its business plan. We are grateful to Catwalk Capital for their diligence and aid in the acquisition of this capital facility.”
The Owsley property is made up of about 1,000 acres of fee surface and coal rights, with a mine plan in place and a phase 1 permit technically approved by the Kentucky Department for Natural Resources. The permit may be activated by posting the required reclamation bonds and liability insurance, the company noted.
The recoverable thermal coal resource on the Owsley site is in excess of 5.7 million tons. About 3.5 million tons are recoverable with surface and highwall mining, and an additional 2.2 million tons are recoverable by underground mining, the company said. These coal resources have a sales value in excess of $300m over 10 years of planned production.
Liberty Coal said its plan is that the Owsley production will be followed by a series of similar sized projects in the Appalachian coal fields over the next three plus years.
Said in the company in an Aug. 20 SEC filing about its history that it was first incorporated in the state of Nevada in 2007 and was developing business activities in teacher recruiting. The company changed its business focus in 2010 to developing mining operations.
The SEC filing said that in February, the company entered into a letter of intent to acquire private mineral leasehold rights to certain coal mining property in Owsley County with AMS Development LLC and Colt Resources Inc. This property covers about 1,000 acres and has approximately 3.6 million tons of recoverable coal. There is a permit technically approved by the Kentucky DNR for the first 80-acre phase. In consideration for the mineral property leasehold, the company must pay $20,000 within 5 days of the date of the Owsley Agreement, $60,000 within 45 days if the company decides to move forward and purchase the rights to the mining permits and operate under a leasehold. As part of the agreement, the company agreed to enter into a royalty agreement with AMS and Colt, pursuant to which AMS and Colt would receive a minimum royalty of $5.00 per ton or 10% of the gross sales price per ton.
The SEC filing said the company has given up on further pursuing two intitial coal mine projects in Wyoming called South Powder River and North Ranchester.
The Kentucky Secretary of State’s corporate database shows the only AMS Development LLC that it has registered as inactive and that its officers are David Actizer, Pat Mitchell and Glenn Sitter. That database doesn’t show a Colt Resources Inc.