Thelon Capital Ltd. Purchases Clear Fork Mining Co., Jellico Coal Project
20.12.2010 | Marketwire
VANCOUVER, BRITISH COLUMBIA -- (Marketwire - Dec. 20, 2010) - Thelon Capital Ltd. (TSX VENTURE: THC) (FRANKFURT: TFHC) is pleased to announce that it has exercised its option to purchase Clear Fork Mining Co., whereby Thelon will acquire the Jellico Coal Project in Tennessee, as per the Letter of Agreement announced May 18, 2010.The Jellico Coal Project consists of 6350 acres of fee simple land in the Cambell and Claiborne counties in the State of Tennessee. On March 1st 2006 Mountainside Mining Co. of Kentucky entered into a lease agreement with Clear Fork to permit and mine 640 acres of the Jellico Project. Mountainside Mining is a private contract miner. During the fiscal year of 2010 they have mined 185,600 tons of Compliant Coal resulting in royalty payments to Clear Fork of approximately $1.1 million. Production increased throughout the year and Mountainside Mining Co. expects to further increase production in 2011 as well as add additional tons under permit. There are approximately 3 million tons of Coal under permit with an expected mine life of 8 years.
According to a report authored by A. R. Leamon in July 2009 the Jellico Project consists of approximately 13 million Tons of high quality compliant Thermal, Metallurgical and Silicon Metal coals. This is a historic report and is not 43-101 compliant and therefore cannot be relied upon. The company is conducting a work program to confirm and expand the historic reserve and have a NI 43-101 report completed.
The purchase agreement requires Thelon to pay $1 million on signing, $3 million in cash on March 25, 2011 and take over debt obligations of $4.8 million. The vendor will also hold a 10 yr note for $8.45 million bearing 6% interest. The company has raised approximately $1 million in the exercise of warrants and options to make the signing payment.
“The purchase of the Jellico project and its production is an important milestone for Thelon, as we build the company into a premier producer in the coal industry. We look forward to a long working relationship with this talented and experienced team,“ stated Jason Walsh, President of the company.
Thelon and its Directors would like to welcome William Cousins to the Advisory Board Mr. Cousins has extensive experience in owning and operating Coal mines in the Appalachians. He will be the managing director of Clear Fork Mining Co.
Timothy Webb P.E., a qualified person under national instrument 43-101, has approved the technical information contain in this news release.
THELON CAPITAL LTD.
On behalf of the Board of Directors
Jason Walsh, President
The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this News Release.
For more information, please contact
Thelon Capital Ltd.
Jason Walsh, President
(604) 682-1643
(604) 682-1666 (FAX)
www.theloncapital.com