The company announced this week that it had commenced full production from the Whitesburg Friday Branch mine, just days after closing a 40% ownership stake acquisition and said Wednesday that it expected commercial sales would begin the third week of March and start generating cash flow.
In addition to the revenue projection, Universal Bioenergy estimated that it would see annual earnings of $5-8 million.
It currently has an agreement in place to begin selling steam coal at an annual volume of more than 4 million tons.
The purchaser is a subsidiary of the nation’s sixth-largest metallurgical coal producer.
Under the ownership structure, Universal will purchase coal from Whitesburg and sell it directly to coal producers and electric power utility customers.
Through Whitesburg, the firm currently has over 3Mt of recoverable coal under contract from the mine’s Elkhorn No. 3 seam in Letcher County.
The Whitesburg Friday Branch mine is projected to generate revenues of more than $264 million from thermal sales over the next five years, which will help the company continue to grow and expand.
“This is a major turning point for the company since Whitesburg has obtained all of the state permits and completed all of the required land reclamation,” Universal president Vince Guest said.
“This puts our coal production and sales about one month ahead of schedule.
“The drilling and blasting in preparation for removal of coal is ongoing and blasting for cutting of new roadwork for trucks to access other areas of the mine.”
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.
The company first announced plans to obtain a major stake in Whitesburg’s assets and interests from JLP & Partners on September 26, 2011.
At that time, the company projected the acquisition would provide it with a significant return on investment.
Universal Bioenergy was founded in 2004.
The company produces and markets natural gas, petroleum and propane in addition to coal.
Whitesburg’s output will be marketed to electric utility customers.
