The letter states Andean Coal can earn 51% interest in all of Carbhid’s investments in the Escalone’s property in return for investing $US830,000 ($A932,000) in exploration and development of the property by the end of 2014.
Under terms of the agreement Carbhid will remain the operator.
The Escalones property covers a 90.58 hectare section of Mining Concession Agreement FGL-111, located in the Boyacá Region of Central Colombia.
Since 2012, Lara and Andean Coal have invested $US330,000 of development work in the Escalones property to acquire a 19.9% interest in Carbhid.
The funds were predominantly used to develop the El Diamante and Carbhid 2 mines. The aim is to increase production of the El Diamante mine from 300t per month to 1500t.
At Carbhid 2, the first operational front was opened in January and yield was expected to be higher than El Diamante. Work is ongoing to access and develop deep coal seams.
On February 5, Andean began development on a third inclined shaft, Carbhid 4. The shaft accesses the La Cisquera coal bed, which has an average thickness of 4.5m.
The long-term goal for the Escalones property is to reach a monthly production of 15,000t per month.
