Phase I of the program, which covers a total of 24 drillholes in 13 different locations, was approved by the state’s Department of Environmental Quality Coal and Uranium Program on July 29. The amended permit adds 16 more drillholes in nine different locations.

American Power and its retained driller, Boland Drilling, had completed 5750 feet at nine drill locations at the Judith Basin County site as of September 9, and said they expected the initial phase of the program to be completed imminently.

“The board of directors … is very pleased with the results to date and has approved the initiation of Phase II of the drilling program as soon as Phase I is completed,” president and chief executive officer Al Valencia said.

“We are also pleased to inform our shareholders that preliminary findings to date are in line with our technical team's expectations, with seven out of nine drill targets encountering coal intervals.

“Drill cores will be shipped to Standard Laboratories in Casper, Wyoming for analysis according to ASTM standards [and] initial sampling results are expected within two to three weeks."

In all, American Power's planned exploration drilling program consists of 61 drilling sites and will involve drilling of 53,875ft total.

The intent of American Power’s drilling program is to classify significant portions of Pace’s coal holdings as proved and probable reserves, and ultimately to establish sufficient resources to support an operations lifespan exceeding 20 years.

The Denver-headquartered company acquired the 29,000 acres that make up the Pace Coal Project in April 2010.

Estimated resources in place, based on exploration work by Mobil Oil (now ExxonMobil), range from 172 million up to more than 410 million tons of high volatility bituminous B coal.