Global Met Coal Corp. (
TSX: V.GMZ,
Stock Forum) has been working since September 2011 on the development of the Black Creek mine project, located in Jefferson County, Alabama.
The project covers over 400 acres and contains three coal seams having an aggregate thickness of up to five feet. Mining operations adjacent to the project are currently mining and selling coal from these seams. Current prices received for metallurgical and specialty coal range from US$140 to US$180 per ton in the region.
According to the
Global Met Coal press release, progress has recently been achieved by the company in three key areas. These include a coal acquisition agreement, permitting and financing.
The company has signed a new letter of intent (LOI) dated Jan. 16, 2014 by which the company has been granted the exclusive right and option to purchase the surface rights for parcels of land comprised in the Black Creek mine project. The LOI eliminates the US$3.0 million purchase price for the land rights. The optionors will now receive US$30,000 upon execution of the LOI and an additional US$30,000 within ninety days after the execution of the LOI. Ninety days after obtaining a mining permit, the optionors will be paid US$20,000/month. In addition, the optionors will receive a 7.0% royalty payment on all coal sales.
Additionally, the company has received the final permit from the Alabama Department of Environmental Management. The company will now focus on obtaining customers for the coal, contract miners and final mine design for construction.
The timetable for development should be finalized within a month and when that's complete, the company will make a public announcement.
The company also announces that further to the news release dated Sept. 30, 2013, it has signed a new subscription agreement dated Jan. 22, 2014 with Global Resources Investment Ltd. (GRIL), an arm's length party to the company, which replaces the original subscription agreement dated August 9, 2013.
Under the new subscription agreement, the company has agreed to subscribe for 414,937 new ordinary shares of GRIT at a subscription price of £1.00 per share. In consideration of the purchase of the GRIT shares, the company has agreed to issue to GRIT 15 million units at a deemed price of £0.0277 per unit, which is the equivalent of approximately $0.05 per share. Each unit will consist of one common share and one-half of one share purchase warrant. Each whole warrant will entitle GRIT to purchase one additional share of the company at a price of $0.05 for 24 months. The value of the transaction is approximately $750,000 based on the current exchange rate. Upon closing the 15 million shares will represent approximately 18.6% of the then issued and outstanding shares of the company.
GRIL has been established to exploit investment opportunities in the junior mining and natural resources sectors worldwide, with an investment objective to generate medium and long-term capital growth.
Global Met Coal is an exploration and development company currently focusing on the acquisition of advanced stage properties with special emphasis on metallurgical coal projects.
On Wednesday, Global Met Coal rose 66.7% to $0.05 a share. The company had a market cap of $3.3 million, based on 65.7 million shares outstanding.