Australia’s Attila Resources Ltd. (ASX: AYA, AYAO) said Nov. 27 that it has seen strong results from recent exploration drilling at its Kodiak Hard Coking Coal Project in Shelby County, Ala.
The Kodiak project currently hosts an inferred Joint Ore Reserves Committee-compliant resource of 81 million tonnes of premium hard coking coal with a 12,400 meter drill program continuing with the aim of converting the resource to the measured and indicated categories, the company noted. Analysis from a total of eight holes has indicated that the Atkins and Coke coal seams will produce a premium hard coking coal. The results received to date show that the coal quality is very consistent throughout the basin contained within the Kodiak project, Attila added.
Given the quality and consistency indicated by these results, the company said it has initiated discussions with several key potential off-take partners in the export market and potential financing solutions are currently being explored.
Attila also said that the preparation plant and rail loadout facilities at the site have successfully been restarted. The plant, which was designed by engineering firm Sedgman and constructed in 2007, operated for approximately 18 months before it was placed on care and maintenance due to the closing to the Coke No. 1 mine by a prior owner. This restart was done with the aid of Attila’s joint venture partner, coal executive Don Brown’s TBL Metallurgical Resources LLC. The prep plant operates at a rate of over 300 tonnes per hour which equates to an annual throughput of about 2.5 million tonnes of coal (assuming a 75% utilization rate). The company said it believes that the Kodiak plant can run at a rate of 400 tonnes per hour with minimal additional capital required.
Earlier this month, Attila’s said its management team met with key personnel from railway operator, Norfolk Southern, at the Kodiak site. NS operates the rail infrastructure that connects to the existing Kodiak rail spur. It is understood that this rail infrastructure is underutilized and has sufficient excess capacity to support Kodiak’s operations, the company said.
Attila is currently investigating transportation options to the ports of Mobile (350 kilometers from Kodiak) and New Orleans (550 kilometers from Kodiak) as potential export hubs for its high quality coking coal. The company is also investigating barging opportunities down the Black Warrior and Tombigbee river systems that run from the port at Birmingham (approximately 40 kilometers from the Kodiak project) to the Port of Mobile.
Attila and TBL continue to progress discussions with mineral rights owners with a view to acquiring additional leases of metallurgical coal within the Cahaba Coal Basin. There is an estimated 500 million tonnes of metallurgical coal remaining within the Cahaba Coal Basin and the company, with the assistance of geological consultant Stagg Resource Consultants, intends to acquire additional key leases of this high quality coking coal within close proximity to its existing infrastructure at Kodiak.
Kodiak is a mine once owned by Walter Energy (NYSE: WLT), a major coal producer in Alabama. The “temporarily idled” prep plant is still listed with the U.S. Mine Safety and Health Administration as the Kodiak #1 plant of Walter’s Kodiak Mining Co. LLC unit. The Coke No. 1 mine is listed with MSHA under Kodiak Mining as “abandoned,” with last production in 2008 (69,487 tons produced that year), with 95,336 tons produced in 2007.