Beacon president Adam Marek told International Longwall News that a non-disclosure agreement prevented it from making the seller’s name public at the time.
“Beacon purchased the coal rights from a commercial collection agency that acquired the property several years ago from a distressed company which was unable to establish a mining operation,” he said of the 1020 acres in Westmoreland County of which it now has 100% ownership.
Marek also confirmed for ILN that Beacon was still talking with “multiple companies” with mining experience to be potential partners in the project’s development.
“We hope to choose a partner within a month,” he noted.
“Beacon's consultants estimate that these rights will provide the company access to up to 2.5 million tons of coal production during the extraction period.”
Marek added that Beacon was also not able to release the identity of that firm or any of its geologists.
The acquisition comprises two parcels of reserves, one with 750 acres and one with 270 acres. The parcels run together, Marek said, so the company intends to form one mining operation.
“We have not yet applied for permits,” he said of the new mine, which will extract from the Upper and Thick Freeport coal seams.
“We are reviewing certain environmental factors that will dictate the proposals we will make in the permit applications.”
The purchase completion is a source of capital for Beacon, but the company’s officials realise that the process ahead to develop the longwall will be lengthy and will ultimately “provide steady and significant revenues” over the next half-decade.
“Pennsylvania coal has been sold at a rate of $US40 to $150 per ton over the past year – the company's objective at this point is to achieve annual revenues in the area of $0.0037 per share to $0.005 after mining," Marek said.
He said the company continued to look at several other coal properties and was in negotiations for reserves in Westmoreland, Washington and Fayette counties in western Pennsylvania.
“Primarily, we're interested in the rights that can be obtained at prices below market value, such as those held by estates, bankrupt companies, struggling companies, or those which have been foreclosed on, and any other properties," he said.
The talks are in the early stages and include multiple parties, Marek told ILN.
“The reserve sizes vary between the offerings, so it's impossible to speculate at this time regarding the sizes,” he said.
Beacon Energy, a wholly owned subsidiary of Beacon Redevelopment Industrial Corporation, will be the legal owner of the properties.
Pennsylvania is the sixth largest US coal producer at 29 billion tons annually.
