No additional terms of the memorandum of understanding, announced Tuesday, were made. CCPF said that it conducted an extensive legal and technical due diligence phase before moving ahead with the process.
“Preliminary reports show that the property contains both low volatile metallurgical coal and semi-anthracite coal in significant quantities,” chief executive officer Ron Stovash said.
“Our goal at Boavita is to initiate an exploration program and mining operations that will result both in proven reserves and saleable coal in 2012.”
CCPF expects it will sign definitive agreement for the purchase of the concession by the end of this year, which will then permit the company to perform 18 to 24 months of exploration activities on the property.
It will then have the option to move ahead with the purchase if exploration is successful, Stovash said.
Boavita covers approximately 1550 hectares, or 3830 acres, and will bring the company’s total concessions acreage to nearly 30,000 acres.
In September, the company announced the growth of its South American holdings with the acquisition of additional metallurgical coal properties, including a permitted mining operation, in Colombia.
The deal – made with a private party for a purchase price of $US4 million – complements previous acquisitions by the company in the Santander district of Colombia.
The Ruku concessions, as they were titled, are located near Socota, Boyaca.
CCPF said the Ruku agreement gave it a 70% working interest, including active metallurgical coal mining operations currently producing about 10,000 tons of coal annually. The company intends to invest additional capital over the next two years to increase production.
Colombia Clean Power and Fuels is developing mining, coking and clean coal technology facilities in Colombia and intends to produce both metallurgical and high-grade thermal coal while also putting into place advanced coal technologies, including coal gasification and coal-to-liquids.
The Republic of Colombia is the tenth largest producer of coal worldwide and the fourth largest coal exporter.
