American Power has already worked with Weir for the past two years on the Pace project, and has commissioned this phase to determine its scope based on all available exploration data collected so far.

The consultant also will recommend additional exploration drilling options to further delineate the property’s reserves and resources.

Specifically, the study will include the preparation of a drill hole database as well as the verification of seam correlations, the preparation of a seam reserve map and definition of mineable reserves and resources.

The feasibility study portion will involve a mine plan suitable to geology and production requirements and projections for production capacity, productivity, staffing levels, equipment and facilities, capital expenditures and operating costs.

All work will be done in compliance with US Geological Survey and the US Securities and Exchange Commission requirements.

American Power chief executive Al Valencia said the company was working on a reserve and mine feasibility study with exploration data obtained during the first two phases of its drilling program and data from previous exploration work carried out by Mobil Oil (now Exxon).

The Pace drilling program is expected to begin again later this year and incorporate the additional drilling results into the reserve and mine feasibility study.

In all, American Power's planned exploration drilling program consists of 61 drilling sites and will involve drilling of 53,875ft total.

The American Power drilling program aims to ultimately establish sufficient resources to support an operations lifespan exceeding 20 years. It also will be used to classify significant portions of Pace’s coal holdings as proved and probable reserves.

The Denver-headquartered company acquired the 29,000 acres that make up the Pace coal project in 2010.

Estimated resources in place, based on Mobil’s prior exploration work, range from 172 million up to more than 410 million tons of high volatility bituminous B coal.