Entering text into the input field will update the search result below

America West Resources, Inc. (AWSR) Completes Development of Horizon Coal Mine in Utah, Increased Production and Reduced Overhead Improves Profitability

May 26, 2011 2:13 PM ETQ
Please Note: Blog posts are not selected, edited or screened by Seeking Alpha editors.

America West Resources, an established company positioned to make huge moves in domestic coal production, with a firm production base already established in Utah, reported initiation of full production at the Horizon Coal Mine in Carbon County (roughly 120 miles outside Salt Lake City) today.

Mine development has been completed on schedule via room and pillar, with today marking the end of a three-year process that has networked a five tunnel (20 feet wide) system extending up to three miles. Shuttle car and conveyor belt systems have been installed, as well as the electrical and water supply necessary to conduct full production at optimal levels.

With an estimated 16M recoverable tons of high quality thermal coal reserves now accessible for production within the 1,640 acre mining leasehold, the Horizon Coal Mine is an extremely well appointed and carved out front end capable of supporting in excess of 60k ton per month output rates with two continuous miners. Having already produced some 1.6M tons, the Horizon Coal Mine activity should place AWSR in positive cash flow this quarter, leading to a plan by the Company for expanding output at Horizon to 90k tons per month (over 1M tons per year) via the addition of another continuous miner in the second part of 2011.

With roughly 39% of the world’s electricity coming from coal and some 135 new coal plants under construction worldwide, the export market for domestically produced coal is really starting to heat up. America West is adroitly exploiting this key opportunity to expand on its existing strengths in the mining of high BTU compliant (low-sulfur) coal and subsequent sale to utilities/industry in the western US, positioning the Company for significant growth as a strong global supplier as well.

Between emergent technologies like coal gasification, which is an extremely versatile, highly efficient and environmentally sound processing technology, and coal to diesel conversion technology, America’s vast coal reserves are becoming increasingly attractive. With more than half of the US power supply projected to be coming from coal in 2025, AWSR is able to carve out a nice chunk of the domestic market, where 97% of all coal consumed comes from domestic production.

President and CEO of AWSR, Dan Baker, commented on the transitioning to mobile roof supports or MRSs to replace the remaining pillars of material in preparation for maximum production and explained how this process reduces the maintenance overhead substantially throughout the mine.

Baker pointed to future developments at Horizon planned by AWSR, like the implementation of a longwall mining system, which would increase output capacity to somewhere in the three to six million tons per year range. Baker concluded that implementation of a longwall system would require additional financing and thanked the rock steady support of John Thomas Financial in helping to finance Horizon to its current full production status.

Baker called this milestone achievement for AWSR an “inflexion point” for the Company and expressed great confidence that the “future has never looked brighter” for America West Resources.

For more information on America West Resources, please visit the Company’s website at: americacoal.com

Please see disclaimer on QualityStocks website: disclaimer.qualitystocks.net

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

Recommended For You

To ensure this doesn’t happen in the future, please enable Javascript and cookies in your browser.
Is this happening to you frequently? Please report it on our feedback forum.
If you have an ad-blocker enabled you may be blocked from proceeding. Please disable your ad-blocker and refresh.