LAS ANIMAS COUNTY – Toronto-based Cline Mining Corporation has announced completion of its acquisition of New Elk Coal Company LLC near Trinidad, together with all of the New Elk Coal resources and coal mine properties and hard assets.
The purchase price for New Elk was $15.4 million, the assumption of existing $2.8 million and $967,000 mine reclamation bonds and a $1.00 per ton royalty on coal sales with Cline having a buy-out right for $15 million.
The total of the acquisition costs and the capital and refurbishment expenditures to bring the mine back into commercial coal production at a production rate of 3 million tons of coal annually are estimated by New Elk management at U.S.$100 million. Cline Mining Corporation says it is in the process of arranging its ongoing financing requirements.
The New Elk Coal properties contain 315,000,000 tons of National Instrument 43-101 (â€NI 43-101?) compliant in-place metallurgical steel making and thermal grade coals, according to technical reports.
The New Elk Coal assets include a coal preparation plant with a designed production capacity of 550 tons per hour, product coal silos and rail load-out, buildings, railway right of way, surface real estate, mining equipment, conveyor systems, electrics, underground workings with mine portal access from the plant site, mine permit and coal waste dump.
The Company and New Elk Coal management are proceeding with bringing the mine back into commercial production without delay. On completion of the planned capital and refurbishment input the plant and mine will have the capacity to produce 3 million tons of metallurgical steel making coal annually.
The management plan is to restart production within six months at an annual rate of 500,000 tons of coal in the first stage, initially trucking to rail head, and increasing production to the present plant design capacity of 3 million tons a year by year three with the re-installation by New Elk Coal of the rail line to the major railroad carriers from the plant to provide unit train service.
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