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Share Name | Share Symbol | Market | Type |
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Benz Capital Corp | TSXV:BCC | TSX Venture | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
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0.00 | 0.00% | 0.07 | 0.07 | 0.10 | 0 | 01:00:00 |
CanAm Coal Corp. (TSX VENTURE:COE) ("CanAm" or the "Company") is providing additional disclosure to the news release issued on June 9, 2011 regarding the 6 million tons of coal reserves at Birmingham Coal & Coke ("BCC"). This additional disclosure addresses further details around the determination and the economics of the reserve. Reserve Determination and Calculation A general definition of coal resources and reserves states that: "A coal resource is coal contained in seams, occurring within specified limits of thickness, and depth from surface. A resource tonnage is always calculated on an 'in place' basis, that is, mining or other recovery factors are not applied. A reserve is that portion of the resource which is anticipated to be mineable under prevailing technological and economic conditions, based on the completion of appropriate studies and which has no legal impediments to mining." In the technical report, coal was classified based on its assurance of existence; i.e. the degree of confidence in the quantity estimates and its demonstrated economic and recoverable viability and, in this context, Mr. Nikols concluded that all coal, that was the subject of this study, met the criteria of Proven Reserves and no other categories of coal are being reported. In place of a feasibility or other forecasting study type, all economic and technical considerations in the study are based on the actual results of ongoing mining and product sales. Considerations, such as: thickness of overburden, seam thickness, recoverability percentage, average grade, all costs and incomes, are and have been evaluated in light of recent mine and corporate performance. Measures or factors used in the calculation of reserves. -- Thickness of coal - inches -- Thickness of overburden or depth to coal - feet -- Stripping Ratio (overburden tons : tons of coal) -- Area measures - acres -- Density - pounds/cubic foot -- Coal Quality ASTM (chemical)- percent -- Heat Value ASTM in British Thermal units/ pound - BTU/lb The standard in place coal tonnage calculation method from Pfleider is: 1. Estimated raw tons per acre foot = 43560 sq.ft/acre x1 ft x lb per cu ft/2000 lb or 1 short ton 2. Estimated raw tons per acre = Estimated raw tons per acre foot x measured seam height 3. Estimated loss or recovery factor in percentage As to the recovery factor, or the percentage of total tons of coal estimated to be recoverable from a given area in relation to the total tonnage estimated to be in the reserve base in the ground, Mr. Nikols used a factor of 85%. Since BCC and its three properties are ongoing, open cast mining operations, it is clear that the recovery factors, most appropriate for a given seam, at a given operation are established over time through experience. Eighty-five percent (85%), or the value established, is also a common value in other Alabama mining operations where the coal seams are thin to moderately thick and have similar geological conditions. Also, depending on a number of factors, 85% has been found to be conservative at all three properties and values closer to 90% are achieved with regularity. Data Review The technical study included, but was not limited to, a close examination of all assay and drilling data in BCC's files. Tabular data for each mine property, such as drill hole locations and results, assays, etc. were assembled and independently reviewed by Mr. Nikols and all such data is provided in the technical report. Mr. Nikols also evaluated the relevant data submitted by BCC regarding coal thickness and quality which included data from 269 drill holes; 67, 101, and 101 at the Bear Creek Mine, the Gooden Creek Mine and the Old Union Mine respectively. The core samples obtained and analyzed are consistent with historical data and coal quality is representative of the proposed mine areas. In Nikols' opinion the sample collection, preparation and testing are reliable and representative of the Bear Creek, Black Creek and Jefferson seams of coal and are sufficient to define the coal reserves of BCC. Economics As part of the technical study, an economic analysis was performed for the period 2011 through 2020 which considered coal prices and unit operating costs consistent with historical performance and with typical coal price and unit cost inflation factors incorporated into the model. For 2011, production is forecasted at 480,000 tons (as compared to a three year historical average of 460,000 tons), coal sales pricing at US$87/ton, production cost of US$55/ton and EBITDA of US$17/ton. Capital cost projections over the period include US$1 to US$2 million each year for equipment rebuilds and refurbishment and US$2 million each year for capital equipment replacement. On this basis, the technical report shows a pretax net present value (NPV) of US$39 million at a 12% per annum discount rate. Summary of Proven Reserves A summary of the Proven Reserves of the 3 coal mining properties combined is shown in the table below. Summary of Proven Reserves ---------------------------------------------------------------------------- Bear Creek Old Union Gooden Creek Total ---------------------------------------------------------------------------- Acres Tons Acres Tons Acres Tons Acres Tons ---------------------------------------------------------------------------- Permitted Active Mining 155 310,000 406 720,000 178 445,000 739 1,475,000 Permit Pending 784 1,347,750 729 1,275,000 726 1,893,800 2239 4,516,550 ---------------------------------------------------------------------------- Total 939 1,657,750 1135 1,995,000 904 2,338,800 2978 5,991,550 ---------------------------------------------------------------------------- Notes: 1) Permitted Active Mining refers to that coal where all environmental and operating permits are in place and active mining and reclamation was proceeding as of January 1, 2011. 2) Permit Pending refers to that coal where all mining permits are not yet granted (in some cases, environmental permits have been granted). The 6 million tons of reserves at BCC are low sulfur, high-volatile A Bituminous and in some instances exhibit near metallurgical coal characteristics. These reserves are extractable through open pit mining methods with no washing required. A recovery factor of 85% has been used in the calculation of the reserves which is standard with these coal seams in Alabama and conservative by BCC's historical recovery rates. Heating value for these coals ranges from 11,000 Btu/lb. to 13,000 Btu/lb. Sulfur percent, as a constituent of the ash, ranges from 0.7% to 1.6%, which makes for compliance sulfur blended coal products. The percent of ash in the coal ranges from 6.0% to 16.0% depending on the seam being mined at the time of production. Dennis Nikols, P. Geo., a qualified person, has reviewed and verified the technical mining information contained in this news release. About CanAm Coal Corp. CanAm is a coal producing and development company focused on growth through the acquisition, exploration and development of coal resources and resource-related technologies. CanAm's main activities and assets include its four operating coal mines in Alabama, the exclusive rights to a proprietary Coal to Liquids technology which converts coal into liquid fuels (such as oil, jet fuel) at an economical cost with zero airborne emissions and the Buick Coal Project which holds significant coal resources, 188 million tons of indicated and 103 million tons of inferred coal resources, in Colorado, USA (see the technical report entitled "Limon Lignite Project, Elbert County, Colorado, USA," dated October 26, 2007 and filed on SEDAR on November 2, 2007). Other coal and related opportunities continue to be evaluated on an ongoing basis. This news release may contain certain forward-looking information. All statements included herein, other than statements of historical fact, is forward-looking information and such information involves various risks and uncertainties. There can be no assurance that such information will prove to be accurate, and actual results and future events could differ materially from those anticipated in such information. A description of assumptions used to develop such forward-looking information and a description of risk factors that may cause actual results to differ materially from forward-looking information can be found in the Company's disclosure documents on the SEDAR website at www.sedar.com. The Company does not undertake to update any forward-looking information except in accordance with applicable securities laws.
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