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NAG subleases processing plant

CANADIAN operator North American Gem will maintain priority for its own coal processing in a one year deal to sublease its North American Processing Facility to Kentucky Industrial Services.

Donna Schmidt
NAG subleases processing plant

The company, who also owns a group of leases and active operations in the state, said that KIS would become exclusive operator of the Kentucky-based plant during the agreement and would assume responsibility for operations management as well as all incurred costs.

NAG will collect a US25c per ton net overriding royalty for coal shipped from the facility, and the coal produced from its mines will be given top priority for processing.

“NAG US continues to explore its current leases by stepping out beyond what the company already considers its minable coal and evaluating the quality of newly discovered coal,” officials said, noting that it continues to evaluate the 470-acre Brian Jones lease and the 560-acre Gilliam Hill South lease.

A comprehensive report will be compiled on those projects once work is complete.

While NAG has received the access road permit for its Swan Pond lease, it has evaluated an alternate access road and found it to be a more efficient option for transport of coal from the minesite.

The company is currently awaiting the new permit so that crews can progress with operations at the Swan Pond leases, also known as Mine No.3.

The producer also reported continued work at its No.2 operation to improve production figures following irregularities over the past 12 months.

“Currently NAG Mine No.2 is being mined intermittently, and the company is working to alleviate the legal issues which have been contributing to the production inconsistencies,” NAG said.

In addition to Kentucky, the junior also has a coal focus on West Virginia and Saskatchewan.

NAG also has interests in uranium, copper, gold, molybdenum and other base metals in Canada.

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