At the Rosa mine in Alabama, the companies have been stockpiling raw coal for the last two months in preparation for a new washing facility, which is now under construction.
A permit application for the plant has been submitted to officials and is expected to be approved soon.
Once operational, the wash plant is expected to significantly increase recoveries from Rosa and reduce transportation costs.
A second auger unit has ordered that will also increase production at the mine. Delivery of the machine is expected in September.
Commissioning of the facility is anticipated during this year’s third quarter.
Development has commenced at the fully-permitted Rex No. 1 underground complex in the Columbian Mountains on the border of Kentucky and Tennessee.
“MCoal has completed building new access roads to the existing mine works, leased additional surface area to accommodate a coal preparation facility at the mine entry area, prepared the mine entry area, purchased necessary underground mining equipment and is currently installing collars at the mine entries,” the company said.
“Once collar installation is complete, MCoal plans to commence underground rehabilitation of mine entries and expects to commence production in third calendar quarter of 2011.”
Finally, with regards to its acquisition of Kentucky surface assets owned by Ikerd and initially announced last year, Novadx/MCoal said it had agreed to extend closing on the deal pending the satisfaction of certain conditions, including TSX Venture approval. In the meantime, MCoal has taken over the operations’ financial, administrative and mine management control.
As announced in March, it also extended a loan facility to Ikerd to fund operations.
The Ikerd assets consist of four permitted surface coal mines and related mining equipment in eastern Kentucky, as well as a stoker plant and rail load out facilities.
The first of the mines, Flatwoods, has been in operation since early 2009 producing an average 25,000 tons per month of thermal coal.
Production from Flatwoods was halted last month as the companies await a permit, due in early June, from the KPDES for a new mining area that has been fully developed and is ready for mining.
Once the KPDES permit is issued, mine plans have been developed which will allow mining to begin immediately and at historical production rates. All other permits for the operation have already been approved.
In addition to Flatwoods, MCoal is also seeking to product thermal coal from a second Ikerd mine, Elk Creek, following the acquisition closing. All permits, road access, initial mine development and equipment has been obtained for the complex.
Subject to approval of the remaining conditions, MCoal intends to close the takeover prior to the end of this month. Its extension from Sandstorm Metals and Energy for funding is in place until June 30.
"We are very pleased with our progress on plans to rapidly expand production at MCoal and establish the company as a profitable and recognized participant in the US coal industry,” Novadx and MCoal president Neil MacDonald said.
“To date, our Rosa and Rex No. 1 mine projects are proceeding within budgeted capital expenditures and time frames [and] we are now in control of operations at Ikerd and are confident that we can meet our objectives with this project as well.
“As a result of these initiatives and activities over the past few months, Novadx is well positioned to build shareholder value through meeting our goal of sustainable positive cash flow and achieving our aggregate monthly production targets by the end of 2011."
