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Cline announces first commercial coal shipment from New Elk property

Cline Mining Corp (TSE:CMK) announced Wednesday it shipped its first commercial sale of metallurgical-grade coking coal yesterday from its New Elk coal mine, sending its shares up in Toronto trade.

The coal is from first production at the New Elk mine near the town of Trinidad in southern Colorado.

Metallurgical coal production at the site, which is currently coming from only the Apache seam since last December, is expected to ramp up this year, projected to reach a level of 3.0 million tons per annum in 2012.

According to a 2011 technical report, the New Elk coal mine has a pre-tax net present value of US$1.4 billion, at a 10% discount rate, with a more than 100% internal rate of return (NYSE:IRR) and a payback period of almost two years. These figures are based on the first 20 years of coal production and sales, the company said.

The latest projections compare with those in 2010, which showed a net present value of $1.0 billion, and an IRR of 99%, based on the same 20-year scenario.

The Toronto, Ontario-based company, which also owns several properties in Canada and abroad at exploration stage, is continuing to produce coal at New Elk, stockpiling it at the mine's surface.

Cline's stock on the Toronto Stock Exchange rose 4.76% to trade at $1.76 per share as of 3:10 pm EDT today.