“At the current rate of production NAG is currently on pace to produce and sell approximately 8000 tons of coal per month with the ability to further increase production,” the company said, noting that coal shipments were being sent out daily.
“NAG has steadily increased its production over time as the weather has slowly improved. Currently there are two augers producing and the third auger is expected to be activated in approximately two weeks time.”
No. 1 initially commenced production with its first auger in late November 2009 and while a second was planned to follow shortly behind, the mine suffered a delay due to unusually cold weather that came with a US arctic blast.
NAG said in January that Blue Star Energy, the customer of the No. 1 mine, had approved the coal quality from the product received.
“As a result, the coal purchased by Blue Star will command full market price,” NAG said at the time.
Blue Star, a coal production and brokerage firm which serves industrial coal users and electricity suppliers in the Appalachian region, is purchasing up to 15,000 clean tons of product monthly from the No. 1 operation.
Blue Star completed its Jellico seam analysis at the mine in November and found the sample to contain 8% ash, less than 1% sulfur and 12,800Btu.
NAG also said Friday that Deborah Moses of Engineering Consulting Services and William Grable were proceeding well with the permitting process for which they had been retained.
“One of the previously announced mining permits is currently in the final stage of the process and is expected to be approved in the near future.”
All future NAG permits have been designated as highwall mining operations. The company anticipates monthly production to be at least 25,000t per property.
In total, the producer holds about 5000 acres of coal reserve leases in Knox and Whitley counties in Kentucky, and is actively developing seven for permits.
Based in Vancouver, North American Gem has a coal focus in Saskatchewan, Kentucky and West Virginia.