Australia’s Fitzroy Resources Ltd. said Dec. 17 that it has paid US$250,000 to extend its option to acquire Premier Coking Coal Ltd., which has interests in southern West Virginia, until March 17, 2014.
On Aug. 14, Fitzroy announced that it had signed an option agreement to acquire 100% of Premier Coking Coal Ltd. and its subsidiary, Premier Coking Coal LLC, a U.S.-based coal exploration and development company. Under the option agreement, Premier will use these funds to make the next option payment of US$250,000 to Emmaus Partners LLC under the Emmaus Option Agreement.
Fitzroy said it has completed its due diligence program and is currently finalizing the necessary work required to complete the transaction with Premier and expects to be in a position to announce completion in due course.
Earlier this month, Fitzroy released a report from consultant Cardno MM&A on the subject properties.
Premier Coking Coal LLC holds options to acquire the Emmaus Property from Emmaus Partners LLC and the Blackstone Property from Blackstone Energy Corp., with these properties located in Wyoming and McDowell counties, W.Va.
The Emmaus Property covers about 4,700 acres within the hard coking and metallurgical coal territory in the Appalachian Basin, and was mined until the late 1990s. The coal seams located within the boundaries of the Emmaus Property have historically been sold on the mid-vol hard coking coal market. The primary mineral deposits that have prior development include, in stratigraphic order, the Gilbert, Red Ash (Douglas), and Iaeger coal seams. Despite prior development, extensive undeveloped areas remain in the seams of interest, the report said.
Prior exploration is sufficiently documented in portions of the undeveloped areas to prepare an exploration target estimate on those areas. Additionally, potential for mineable coal exists in seams stratigraphically located below drainage, namely the Beckley seam, also known as the War Creek seam.
The Blackstone Property, which was recently optioned, covers about 1,134 acres and is wholly within McDowell Country. The primary mineral deposits that have prior development include, in stratigraphic order, the Gilbert, and Red Ash (Douglas) coal seams. There is an active deep mine in the Iaeger seam and a permit to commence an underground operation in the Douglas seam. However, the Lower War Eagle and Iaeger seams are excluded in the Blackstone optioned lease and thus, only the Douglas and Gilbert are covered in the report. Despite prior development, extensive undeveloped areas remain in the seams of interest.
Fitzroy has been conducting an exploration program in order to better define and potentially extend the geology information with the goal of evaluating resource areas in both the Emmaus and Blackstone properties.