Altitude Resources Inc. (TSXV: ALI) said Aug. 12 that it has entered into an Exploration and Option Agreement with Elan Coal Ltd. to acquire an option to earn up to a 51% undivided working interest in 27 Alberta Crown coal lease applications.
The property covered by the lease applications is located near the historic coal mining area of Crowsnest Pass, Alberta, Canada. The agreement allows Altitude the right to enter upon and conduct exploration activities in and on all parts of the leases. The leases are adjacent to the Grassy Mt. coal property purchased by Riversdale Resources in January 2013 and are in close proximity to the five operating metallurgical coal mines of Teck Resources, Canada’s largest met coal producer.
Andrew Wusaty, President and CEO, said: “This is a great opportunity for Altitude to have a direct involvement in a second exciting early stage coking coal project. Similar to Altitude’s Palisades project, Elan’s Leases are strategically located near existing infrastructure with spare capacity. There has been a significant amount of information accumulated based on the extensive exploration work performed on these properties which includes drilling, trenching, adits and washability technical data. Elan has initiated a National Instrument 43-101 Resource Report which is expected to be available later this year.”
The Elan leases extend for 55 kilometers northward from Crowsnest Pass along strike in the Kootenay Group coal formation. Five different areas of interest with surface mineable potential have been identified from historic exploration work carried out by companies including CONSOL, Devon Canada, Granby Mining, CanPac Minerals, and Canadian Hunter dating back to the 1940s. More than ten coal seams have been identified on the properties with thicknesses ranging from 3 meters to 10 meters. Coal quality is low- to mid-vol with variable but generally moderate ash content, with good washability and coking coal properties.
In addition to being a director of Altitude, Wusaty is also a director of Elan. In accordance with the Business Corporations Act (Ontario), Wusaty abstained from voting on the resolution passed by Altitude’s board of directors approving the agreement.
The company has retained IBK Capital Corp. of Toronto to complete, on a best efforts basis, an equity financing of up to C$5m in order to meet its obligation under the agreement and for general working capital purposes.
Altitude Resources is a new Canadian coking coal exploration and development company focused on developing its portfolio of coking coal properties in west-central Alberta. Altitude’s most advanced property, the Palisades Coal Project, is located approximately 12 kilometers from CN rail which has the capacity to provide transport of coal to deep-water ports on the west coast of Canada to service the growing demand from world markets. Initial drilling by Altitude on Palisades is expected to commence by mid-August 2013.