The California-based company said that, with the start of sales, it expected the mine would begin generating cash flow. It has projected a revenue average of $US52.8 million and earnings of $5 million to $8 million each year.

Universal picked up its interest in the Whitesburg Friday Branch mine on February 28.

Following the deal’s close, operations began immediately, along with the stockpiling of inventory.

Marketing of the thermal output to its electricity generation customers is underway, and estimated revenues over the next five years could exceed $264 million.

Universal president Vince Guest said the mine was working six days a week, and processing and blending coal of different qualities to obtain the highest price.

“We believe the additional revenue from the sales of coal will strengthen our financial position, and help position us to up-list the company to NASDAQ,” he said.

“Although we cannot guarantee an actual valuation, according to industry valuation standards using average P/E ratios from Standard & Poor’s, at a multiple of 15 times earnings, a valuation of $75 to $120 million dollars is an estimate of the potential additional market value of the earnings to Universal.”

The company first announced that Whitesburg was ready for sales in March.

Under its ownership structure, Universal will purchase coal from Whitesburg and sell it directly.

Through Whitesburg, the firm has more than 3Mt of recoverable coal under contract from the mine’s Elkhorn No. 3 seam in Letcher County.

Whitesburg extracts coal via surface and highwall mining methods and its equipment fleet includes Caterpillar bulldozers with single-shank rippers and SU-blade and rippers, hydraulic excavators, loaders, trucks and other associated equipment.

Universal Bioenergy was founded in 2004 and markets natural gas, petroleum and propane in addition to coal.