www.clinemining.com
Cline Mining is in the business of acquiring, exploring and developing mine mineral resource properties to production in Canada, United States and overseas. The Company is a growth-oriented mine finder, developer and operator with an experienced management team and is supported by its strategic international corporate partner and shareholder, Mitsui Matsushima, a Japanese coal miner and conglomerate, which is also represented on the Cline Board of Directors.
Cline is developing its Lossan and Lodgepole metallurgical coal mine projects in British Columbia, Canada – C.I. 43 101 compliant Reports and feasibility studies completed; extensive diamond drilling program in progress at its Cline Lake gold property Ontario, Canada; additional iron ore mineral exploration on extensions and step-out areas at its Bekisopa, Madagascar iron ore properties; development of its New Elk metallurgical and thermal coal mine property in Colorado, U.S.A.
Cline Mining confirms "premium" coking coal at New Elk in Colorado; to raise $50m in equity offering
Cline Mining (TSX: CMK) said Tuesday that pre-production drilling at its New Elk mine in Colorado has found high quality metallurgical steel-making coal in the coal seams.
The Toronto-based company said that the in-seam coal qualities reported from the recent drill cores show the coal to be in the "premium high-vol category" in each of the seams that will be mined over the next 20 years.
New Elk has completed nine pre-production drill holes thus far, and is drilling a further six to determine the specific coal reserves that will be mined to meet the company's projected 55 million tons of coking coal sales during the first 20 years of production - equivalent to a rate of some three million tons of saleable steel-making coal each year.
The quality of coal in the seams as reported to date from the current drilling has been given a high grade specification on an "as received" basis, and is FSI 7.0-8.0; Ash 8.5%; Moisture 8.5%; Volatiles 35%; Fluidity 30,000 ddpm; Reflectance 0.95%; Sulfur Max 0.5%; and Btu/lb. 13,500-14,000.
The company expects that the revenues generated from the 315 million ton coal resource during its first 20 years could be some $7 billion at current coal prices.
Indeed, Cline believes that the mine has "ample resources" for the future, and after bringing the mine back into production, the company will attempt to expand the mine and increase its production by 100%. It has already installed mine infrastructure for such a decision, it said.
In addition to the high-quality coal the company found during the current drilling program, Cline Mining said it also identified new seams, which as well appear to be metallurgical steel-making coal, meaning these additional seams could be a significant resource in the future.
To complete the development and secure the potential of the New Elk mine, Cline Mining announced separately today that it has agreed to a $50.1 million equity offering, expected to close in early November. The company will sell 25.7 million common shares on a bought deal basis, at a price of $1.95 per common share to a syndicate of investment dealers co-led by TD Securities and Jennings Capital.
Cline has also granted the syndicate an over-allotment option to purchase up to an additional 3.85 million common shares, which could increase the size of the offering to $57.6 million.
The new funds will be used not only for the New Elk coal mine, but also to pay down the company's debt and for potential property acquisitions.
The 15 drill hole program at New Elk is expected to complete this month. The mine, which is located in Las Animas County, Colorado, is accessed directly by paved highway from the town of Trinidad, and is expected to begin its first production in the fourth quarter this year. 1.2 million tons of metallurgical grade coal in anticipated in 2011, ramping up to 3.0 million tons annually by 2013.
Cline explores and develops metallurgical steel making coals in Canada and the U.S., iron ore in Madagascar and the Cline Lake Gold Mine property in northern Ontario.
