North American Gem Inc. (TSX-V: NAG) announced a Letter of Intent (“LOI”) to acquire additional coal leases located in Knox County, Kentucky. The leases, referred to as the “ABGSC Leases” (approximately 410 acres), are currently being permitted for mining under permit #861-0502.
The ABGSC Leases currently has a surface mining permit application in process with the Department of Natural Resources (the “DNR”) offices in Frankfort, Kentucky and it is expected to be approved within 60-90 days. The ABGSC Leases are contiguous with the recently announced Swan Pond and Possum Hollow Leases and host a continuation of the Blue Gem and Jellico seams. Analysis of the Blue Gem seam from the Swan Pond and Possum Hollow Leases are very encouraging showing 3% ash, 0.65% sulfur and a range of 14,200 – 15,200 btu. The Jellico seam averages 6.5% ash, 1% sulfur and a range of 12,500 – 13,200 btu (Previously announced in the May 13, 2009 release).
Blue Gem Coal is a high carbon, low ash, low fusion and low grind (very hard) coal that is found only in a small area along the border of Tennessee and Kentucky in the Cumberland Mountains. The coal seam, throughout the region, runs in thickness from 48-71 cm.
The Blue Gem Coal seam is one of three coal seams in the world that are best suited for production of silicon metals. The other two are found in West Virginia and Columbia, South America. Of the three, the Blue Gem Coal seam is the most sought after. For this reason, coal produced from this seam is not only consumed in the U.S., but also exported extensively to Canada, Norway, Iceland, India, France, South Africa and Egypt.
With the ever increasing demand for silicon metals and silicon products, mineable Blue Gem coal resources are becoming increasingly more valuable. Historically, Blue Gem coal can bring an FOB (Freight On Board) mine price that is as much as 100% higher than high quality steam coal and is typically the highest priced of any grade of coal produced in the U.S.
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The Swan Pond lease has completely destroyed Swan Pond. There is no more pond – it is now a place to park equipment. The residents of Knox have been so demoralized for so long (generations) they they don’t care anymore. Knox, Ky. is one of the poorest counties in the nation, but the coal produced there the highest priced of any grade of coal produced in the U.S., you say? I am from there. Damn you all.
the chemical industry is showing signs of a rebound and will require blue gem coal in order to keep up with the demand for silicon metals.
If find it pretty interesting that the the Blue Gem Coal seam is one of three coal seams in the world that are best suited for production of silicon metals. I think we can all agree where the demand for silicon metals is going….
Does this come under the category of “clean coal”? I hate that term because it is a misnomer but it does have the image of a more environmentally friendly mineral. If so, then it has even more upside potential.