The Australia-based and ASX-listed company said the acquisition was a major accomplishment, rating Black Diamond as a first-class coal operation with modern infrastructure and excellent exploration potential.
Following the bankruptcy of Black Diamond Mining Company in February 2008, BD Acquisition established eight underground and three open cut mines on the Kentucky tenements, hitting capacity of 2.5 million tons per annum.
A $US19 million, 9000 tonnes per hour coal preparation and rail load-out facility at Spurlock was added along with an upgrade to the Ivel plant to 500tph capacity.
Bathurst said BD Acquisition was planning to increase output to more than 5Mtpa through 19 mines by 2010 and had spent more than $25 million in the process, but the operations had all been on care and maintenance since July 2009.
Holding 56,000 acres of coal reserves for some 115Mt of recoverable coal reserves, Bathurst expects to kick off coal mining within three months of the completed acquisition.
Bathurst seeks to use contractors and to start open cut mining to hit production of 200,000 tons per month within the first 18 months.
Ultimately the Aussie company is aiming to hit 3Mtpa of production from the Black Diamond assets, leading to a mine life of more than 30 years.
Total proven underground coal reserves are at 32.6Mt, including 23Mt at Spurlock, 7.02Mt at Mud Creek and 2.57Mt at Highway 80, while total proven surface reserves of 21.1Mt include 11.37Mt at the Ivyton site.
The Black Diamond tenements and operations host coal from the Amburgy, Broas, Fireclay, Haddix, Peach Orchard, Whitesburg Williamson and four Elkhorn seams.
Bathurst says these seams contain highly volatile bituminous coals with sulfur contents ranging from 0.65% to 1.4% and thermal parameters ranging from 12,000BTU to more than 13,500BTU.
“These coal qualities are in strong demand primarily due to their exceptionally high thermal content but also because of environmental restrictions imposed on both electric utility and industrial users of steam and stoker coal respectively,” the company said.
“The Elkhorn seams are particularly suitable for the premium-priced stoker market and comprise over 50 per cent of the company’s reserves.”
Bathurst did not announce the consideration for acquiring the coal assets.
Back in July 2008, the company announced it had acquired Kentucky coal company C&R Holding but in a November settlement last year it cancelled the acquisition and ceased being a producer.
“This settlement agreement was executed as a result of a dispute that arose in relation to substantial and fundamental matters relating to the original purchase agreements,” Bathurst said of the cancelled C&R acquisition in its recent quarterly report.
Bathurst is planning to relist shortly on the Australian Securities Exchange.
