Xinergy Ltd. announces filing of NI 43-101 for Raven Crest and provides
operational update
KNOXVILLE, TN, June 14 /CNW/ - Xinergy Ltd. (TSX: XRG) ("Xinergy" or "the Company") is pleased to announce that it has completed a detailed review of the mineral exploration, development and production activities at its Raven Crest mine reserves located in Boone County, West Virginia. The Raven Crest property extends over 12,000 acres with a train loading facility on the property. The work was conducted under the supervision of Phillip Lucas of Summit Engineering Inc. and is detailed in a National Instrument 43-101 ("NI 43-101") compliant technical report on the property entitled "An Independent National Instrument 43-101 Report Summarising Mineral Exploration, Development and Production Activities of Raven Crest Mining Reserves, Boone County, West Virginia" (the "Technical Report"). The Technical Report contains the first estimate of proven and probable reserves for the Raven Crest mine, which has been developed from previously announced mineral resource estimates. The complete Technical Report is available on the Company's website www.xinergycorp.com and under the Company's SEDAR profile at www.sedar.com. The following summary estimate tables were taken from the Technical Report.
Mineral resource(1) estimates in tons - as at January 2010 ------------------------------------------------------------------------- Measured Indicated Total Measured Inferred and Indicated ------------------------------------------------------------------------- 18,584,200 11,908,900 30,493,100 6,991,400 ------------------------------------------------------------------------- (1) Mineral resource estimates are reported inclusive of reserves. Included in the data were the following seams: Lower Winifrede Rider, Winifrede, Middle Hernshaw, Hernshaw, Upper Cedar Grove, Middle Cedar Grove, Cedar Grove, Lower Cedar Grove, No. 2 Gas, and Lower No. 2 Gas. Mineral reserve estimates in tons - as at January 2010 ------------------------------------------------------------------------- Proven Probable Total ------------------------------------------------------------------------- 10,449,900 6,835,700 17,285,600 ------------------------------------------------------------------------- Mine plan ---------
Of the total proven and probable reserves of approximately 17.3 million tons, approximately 10.0 million tons are surface and highwall mineable, and 7.3 million tons are deep mineable. The base case mine plan represents the estimated production of all surface and highwall mineable proven and probable reserve tons from January 1, 2010 through 2022 at an average production rate of 63,300 tons per month. Cash flow forecasts include assumptions based on production and capital expenditures on the surface and highwall mineable proven and probable reserve tons only and does not represent the potential deep mineable proven and probable reserve tons.
Located in Boone County, West Virginia, the Raven Crest properties comprise approximately 12,262 acres of land. Approximately 5.0 million tons of the 17.3 million tons of proven and probable reserves is currently permitted for surface mining. Currently, Raven Crest is producing at an annual rate of 800,000 tons that can be increased by 50% to 1.2 million tons without any additional capital costs for permits or expansion.
Phillip Lucas, Vice President with Summit Engineering Inc., is a Qualified Person and Independent of the Company in accordance with NI 43-101. In addition, he has reviewed and approved the technical and scientific information contained in this news release.
For details of the resource and reserves calculation and the base case Life of Mine Plan based on proven and probable reserves, please refer to the complete NI 43-101 report.
Operational update on producing mines -------------------------------------
Xinergy completed the acquisition of Raven Crest Mining LLC ("Raven Crest") in late-April of 2010 (see news release dated April 29, 2010). In the months ending April 2010 and May 2010, average production that includes both Straight Creek and Raven Crest properties totaled 75,725 and 126,104, respectively, of clean coal tons, which demonstrates a 67% increase in production for the Company. Total tons sold were 46,921 and 118,284 for April and May, respectively, representing a 152% increase. The blended average price per ton was $67.61 for April and $79.76 for May. This increase in production, sales, and price per ton, translates into a 197% increase in total sales revenue from April 2010 to May 2010.
Mr. Jon Nix, CEO of Xinergy, commented, "The acquisition of Raven Crest has allowed us to increase our proven and probable reserve base by approximately 17.3 million tons. This technical report shows that in addition to increasing our reserve base, the strategic acquisition of Raven Crest strongly positions Xinergy to grow organically and expand contiguously."
The Company continues to implement operational and cost efficiencies at both Straight Creek and Raven Crest to meet its production targets of 1.5 million tons per year and 1.2 million tons per year, respectively, by the end of 2011.
About Xinergy Ltd.
Headquartered in Knoxville, Tennessee, Xinergy Ltd., through its wholly owned subsidiary, Xinergy Corp., is engaged in coal mining in Eastern Kentucky. The Company controls mining properties in Kentucky, West Virginia and Alabama. Currently, Xinergy sells steam coal to electric utilities and industrial companies throughout the southeastern United States. For more information, please visit www.xinergycorp.com.
Forward-Looking Information
This release contains "forward-looking information" that includes information relating to future events and future financial and operating performance. Forward-looking information should not be read as a guarantee of future performance or results and will not necessarily be accurate indications of the times at, or by which, that performance or those results will be achieved. Forward-looking information is not comprised of historical facts and includes, but is not limited to, information concerning the operating costs, capital costs, production, sales, and price per ton of coal. Forward-looking information is based on information available at the time it is made and/or management's good faith belief as of that time with respect to future events, and such information is subject to risks and uncertainties that could cause actual performance or results to differ materially from those expressed in or suggested by the forward-looking information. Important factors that could cause these differences include but are not limited to: the business of the Company may suffer as a result of uncertainty surrounding the acquired assets; the Company may be adversely affected by other economic, business, and/or competitive factors; the worldwide demand for coal; the price of coal; the price of alternative fuel sources; the supply of coal and other competitive factors; the costs to mine and transport coal; the ability to obtain new mining permits; the costs of reclamation of previously mined properties; the risks of expanding coal production; the ability to bring new mines on line on schedule; industry competition; the Company's ability to continue to execute its growth strategies; and general economic conditions. These and other risks are more fully described in the Company's filings with the Canadian Securities Administrators, including but not limited to the Company's annual information form for the financial year ended December 31, 2009. You should not put undue reliance on any forward-looking information. The Company assumes no obligation to update forward-looking information to reflect actual results, changes in assumptions or changes in other factors affecting forward looking information, except to the extent required by applicable securities laws.
%SEDAR: 00021880E
For further information: For further information: Miranda Smith, 647-427-0208
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