Cobalt will acquire leases on six separate tracts covering 5400 acres in Dickenson County, Virginia where numerous metallurgical seams have been identified.
The 900-acre Mill Creek tract has already been permitted for both surface and underground mining and includes a 700-acre expansion area.
The technical report of the area has resulted in metallurgical coal resources of 51.4Mt (measured) and 68.3Mt (indicated) with an additional inferred resource of 127.6Mt.
Proven reserves totalled 15.9Mt.
Information for the report was obtained from 38 drillholes and historical mining data in the area.
The Mill Creek and Davis tracts are being considered for immediate development and both have been reported to contain numerous coal seams with substantial resources.
Coal samples from the two tracts were used for quality analysis and revealed a dry basis clean coal ash and high ash fusion temperature.
Cobalt said it could already begin infrastructure improvements at Mill Creek which would allow metallurgical coal production to begin by the closing of the property lease transactions.
Last month, the miner closed a $US100,000 private placement for expenses related to the proposed Appalachian acquisitions.