Carbonado Coal Company, L.P. – West Kentucky

Carbonado Coal Company is developing a coal property located in Webster County, West Kentucky. The underground mine would access the No. 9 seam which is the predominant seam mined in West Kentucky. The mining conditions are good with a typical seam height of 4.5 feet. Typical clean quality would be 12,200 Btu/lb and 2.5 percent sulfur. This property is twenty miles from the Green River and the Ohio River, where coal barge transportation is readily available.

Eighteen miles east of the property is a large coal power plant owned by Big Rivers Electric Co-operative. The target area is approximately 10,000 acres. The amount of mineable coal is approximately 30 million tons. The area was mainly controlled by Peabody Energy (a NYSE company) and they had leased the property until 2007.

The present owners, Carbonado Coal Company, have begun the permitting process. Weir Consulting of Chicago is conducting the due diligence process. They are familiar with the property and with the local management, and have assessed this to be a worthy project.

As a result of initial conversations with the utility, Carbonado Coal feels that a long term, 5-year contract, starting January 2010, for 500,000 tons a year is achievable. The mining output would be around 750,000 clean tons a year. Other markets on the river are available. Mining costs are comparable to other underground mining operations in the area.


All background studies and drilling procedures have been completed, and the initial mining permit is underway for 67 acres of surface disturbance, and 10000 acres of underground mining for 30 million mineable tons. The expected date for the permit to be issued is fall 2011. Other acreage and tonnage will be added to the permit incrementally.