America West Resources completes mine development and commences full production at Horizon Coal Mine
America West Resources, Inc. (OTCBB: AWSR), a domestic compliant coal producer with mining operations in Central Utah, today announced that it has successfully completed mine development and commenced full production at Horizon Coal Mine, located in Carbon County about 120 miles southeast of Salt Lake City, Utah. It is estimated that there is more than 16 million recoverable tons of high quality, thermal coal reserves under lease at the Horizon Mine.
Over the past 36 months, America West has focused on implementing a mine development strategy utilizing a room and pillar mining approach to excavating coal deposits from the 1,640 acre mining leasehold. A room-and-pillar operation involves creating a network of interconnected tunnels in the coal seam during the mine development stage. These tunnels result from the excavation of a series of “rooms” into the coal bed, leaving “pillars” or columns of coal to help support the mine roof. The rooms and pillars create what on a map looks like a series of city streets and blocks, with the streets being the open rooms and the blocks being the pillars of coal.
During the mine development stage, the Company created five tunnels, each 20 feet wide, which extend up to three miles underground when measured from the surface entrance of the mine to the farthest working area of the mine. Development also included the installation of electrical, water supply, shuttle car and conveyor belt systems throughout the entire mine, necessary to support full production.
Dan Baker, President and Chief Executive Officer of America West, stated, “Now that Horizon has transitioned to full production phase, our mining team will commence with the removal of the pillars of coal. Pillaring involves the use of mechanized roof support equipment, known as mobile roof supports or MRSs, to support the roof of the mine while the pillars are removed. Because the pillars are being removed from a section, time and materials are not utilized to maintain the roof in that area of the mine to the same extent that they are used during the development phase, thus the cost to excavate coal from the mine drops measurably while coal production materially increases.”
With about 1.6 million tons of coal produced-to-date from Horizon, the Company expects to see its monthly production escalate to an estimated average of 60,000 tons now that it is in full production and operating two continuous miners. Consequently, America West remains on pace to achieve positive cash flow in the current quarter and to implement further expansion initiatives, as planned. More specifically, it is management’s intent to deploy a third continuous miner in the second half of 2011, which should help to push monthly coal production to more than 90,000 tons, or over one million tons per year. Longer-term expansion goals include the acquisition and deployment of a longwall mining system at Horizon, which is subject to the Company obtaining the necessary financing. Longwall operations generally produce between three to six million tons of coal per year, on average.
Concluding, Baker added, “We offer our thanks to John Thomas Financial for their assistance in the financings that have supported the Company in its mission to move to full production status. We have arrived at a critical inflexion point in the evolution of America West Resources, and our future has never looked brighter.”
About America West Resources, Inc.
Headquartered in Salt Lake City, Utah, America West Resources is an established domestic coal producer focused on the mining of compliant (low-sulfur) coal and its sale primarily to utility companies and industrial customers in the western U.S. The Company operates the Horizon Mine, which has recoverable, compliant, high BTU coal reserves. For more information, please visit www.americacoal.com.
Read the full news release here.