Blaze Energy (OTC Markets: BLZE) said Oct. 21 that effective Oct. 1 it has entered into a partnership agreement to process and sell coal at the GreenFields Coal mine site located in Gary, W.Va.
The GreenFields mine was previously owned and operated by U.S. Steel, which deposited over its 40 years in operation an estimated 10 million tons of coal fines and 20 million to 25 million tons of coarse coal refuse. Blaze Energy plans to process this high-quality, metallurgical grade coal for re-sale domestically and abroad.
Effective Oct. 2, the company has executed an initial allocation letter with a third-party purchaser for the sale of 960,000+/- metric tons of processed coal. A more definitive agreement is currently pending. At current market conditions, full performance under the agreement would result in $117.5m in gross revenues annually, and based on internal projections, net revenue of about $26m, Blaze Energy said.
Under the agreement, the company said it will; purchase annually a minimum of $4,080,000 worth of mined coal for processing from GreenFields; make advances on its coal purchase in the amount of $500,000 to GreenFields; and if necessary, make additional advances to GreenFields in improvements to the mine, estimated at $600,000. The agreement has an initial term of 24 months, with renewals for an additional 48 months if agreed to by the company and GreenFields.
A. Leon Blaser, Chairman and CEO of Blaze Energy, commented: “We are grateful to GreenFields for the opportunity before us. With its existing reserves, rail accessibility, and geographic location, the ability to operate out of the GreenFields site was critical to the Company’s business model, and the fulfillment of the pending coal sales agreement abroad. We look forward to working with GreenFields, and enjoying great returns in the process.”
Listed since 2010 with the U.S. Mine Safety and Health Administration under the name Greenfields Coal is the Alpheus Refuse Site in McDowell County, W.Va. The site has been listed with a number of companies over the years, including Antaeus Gary Project Inc.