Attila to acquire more Alabama coking coal reserves

Australia’s Attila Resources Ltd. (ASX: AYA, AYAO) said that its 70% owned subsidiary, Kodiak Mining, has entered into a lease agreement and an option agreement to acquire additional coal leases within the Gurnee Property at its Kodiak Coking Coal Project in Alabama.

Attila Executive Director Evan Cranston said in a Sept. 23 statement: “The acquisition of Project X (comprising the Gholson and Clarke coal seams) and the option over the Upper Thompson lease is a significant milestone for Attila as it progresses towards production. In additional to expanding the Company’s potential production profile, the acquisitions provide critical access to coal seams in adjacent properties, previously considered sterilised. More importantly, the Company now has access to all of the major hard coking coal seams in the Cahaba basin.”

He added that Attila is progressing discussions with other lease holders in the area with a view to further expanding its footprint and increasing its share of the 500 million tonnes of coal estimated to remain in the basin.

Attila has entered into an option agreement to lease the Upper Thompson coal seam within its Gurnee Property, from the existing mineral rights holder RGGS Land and Minerals LP. Attila’s independent geological consultant, Stagg Resource Consultants, has provided an initial exploration target of approximately 11 million–13 million tonnes of hard coking coal from an area of about 2,760 acres under the Upper Thompson lease.

The lease contains the former Upper Thompson No. 1 Mine, which was mined by the principals of Attila’s joint venture partners, TBL Metallurgical Resources LLC, from 2008 to 2010 when a change of management redirected resources to another operation within the basin. Attila said it has already drilled eight diamond core holes within the Upper Thompson lease as part of its previously completed diamond drill program, which was the largest single drill program conducted by a coal company within the Cahaba Coal Basin.

Previous drilling indicates that the Upper Thompson seam is typically in the range of 0.8 meters to 1.0 meters thick, with the thicker portions being targeted for any future mining. Historical and current drilling indicates coal from the Upper Thompson seam is a high quality coking coal, with washed coal having a low ash and sulfur content and a high fixed carbon content, making it suitable for export metallurgical markets or in blending for domestic markets.

In addition to the option to lease the Upper Thompson seam, Attila has entered into a lease agreement with RGGS to mine the Gholson and Clark coal seams at an area known as Project X, which is also located on the Gurnee Property. Project X is strategically located within 2.5 kilometers from Attila’s existing coal prep plant and associated infrastructure. Project X has an exploration target of 2 million-3 million tonnes, as determined by Stagg, based on Attila’s existing phase 1 drill program which drilled through the Gholson and Clark coal seams.

Coal qualities are similar to that of Attila’s existing high quality hard coking coal resources and reserves found in Attila’s Coke and Atkins coal seams. The coal seams typically range between 0.8 meters and 1.6 meters in thickness. While the exploration target is only modest in size, the acquisition of Project X provides Attila with key access to what was previously thought to be sterilized coal resources on adjacent properties. Project X contains the historic Boothton coal mine from the 1920s. The historical mains and associated barrier pillars contain the main access into the basin which contains a vast amount of coal resources, based on data derived from historical coal bed methane wells.

The proximity of Project X to Attila’s existing infrastructure places Attila in a unique position to commence production from the Gholson and Clark coal seams, providing a third potential coal mine to increase Attila’s production profile.

Attila plans to fund the acquisition of the option for the Upper Thompson lease and the upfront leasing fee for Project X via its existing cash reserves.

The only operation currently listed under the Kodiak Mining name at the U.S. Mine Safety and Health Administration is the “temporarily idled” Kodiak Plant #1 prep facility, located in Shelby County, Ala.

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.