Endurance Gold Corporation (EDG -- TSX.V) is pleased to announce that it has arranged a non-brokered private placement of 8,000,000 Units, each unit consisting of one common share, priced at $0.05, and one share purchase warrant, exercisable for one year at a price of $0.10. Net proceeds to the company are $400,000. Five officers or directors of the Company participated in the financing. Both the financing and acquisition are subject to regulatory approval. The funds will be used to advance the Carter Metallurgical Coal Project, summarized below, and for general working capital.
The Company, through its 100% owned United States registered subsidiary Endurance Resources Inc., has executed a one year Option to Lease Agreement to explore for and potentially develop and mine metallurgical coal on the Carter Land Company's 2,600 acre privately owned property, located 3 miles south of the town of Iaeger, in southern West Virginia.
In consideration of US$24,000, the Option provides Endurance a one year period in which to explore for and potentially define resources on the large property, at which point it may execute a five year mining lease, automatically renewable for an additional five years, in which to commence mining commercially viable coal deposits. Terms of the lease are an annual Advance Royalty Payment of US$24,000, credited against a royalty, payable to the Lessor, of five percent (5%) of the average gross selling price per net ton of coal mined from underground, and eight percent (8%) on coal mined from open pit operations. An additional over-ride royalty of between one third of one percent (0.33%) and one-half of one percent (0.50%) is payable to individuals who identified the project, and assisted in securing the Option to Lease Agreement. Those individuals will also receive a 200,000 share Finder's Fee, deliverable on TSX Venture Exchange approval of this transaction.
The property covers a portion of the historic Flat Top-Pocahontas Coal Field, which has seen in excess of 3.5 Billion tons of coal production dating back to the 1880's, and is one of the highest quality metallurgical coal fields in the world. Because of the long mining history in the region, coal bed deposit setting and stratigraphy are well documented. Based on historic mining operations on the property itself, and in the immediate area, as well as gas well drill logs and West Virginia Geological Survey mapping data, the potential for five coal seams are believed to exist on the property, encompassed within a vertical stratigraphic sedimentary package of approximately 1,000 feet. That succession ranges from approximately 1800 feet ASL, and approximately 200 feet below height of land, to 800 feet ASL, and approximately 200 feet below local river drainage. The vast majority of these beds would be accessible by adit entry at their respective outcropping elevations. All coal seams are essentially flat lying. The beds include:
The Douglas Coal Seam
The Douglas Coal Seam (also known as the "Red Ash" Seam) outcrops on the property at an elevation of between 1600 and 1800 feet ASL. Based on West Virginia Geologic Survey records, the seam has seen underground production from over 21 mines on the property, largely during the 1960's but as recently as the late 1990's. Total historic production tonnage is unknown, as are remaining resources. Those figures will be quantified as part of a major property compilation in progress, and through diamond drilling by the Company. Mining records are incomplete but suggest the seam is approximately 2.5 feet thick. Raw coal quality data published for the seam (Keystone Coal Industry Manual, McGraw Hill, 1980) indicates a mean BTU value of 14,450, a Sulphur Content of 1.0%, an Ash Content of 6.5%, and Volatility Matter of 26.1%. These parameters define the coal as a "Mid-Vol", high BTU coal amenable to coking.
The Iaeger Coal Seam
The Iaeger Coal Seam, based on known county stratigraphy, and limited intercepts in gas well logs, occurs approximately 300 feet below the Douglas Seam. There has been no production from the Iaeger seam on the property, but this seam has been a major contributor to past production in McDowell County, and state wide has been a prominent coal seam with an original reserve base in excess of 1.6 Billion tons. Published data for the seam in McDowell County suggest thicknesses in the 2 to 4 foot range. Raw coal quality data (from Keystone) indicates a mean BTU value of 15,120, a Sulphur Content of 0.7%, an Ash Content of 3.8%, and Volatility Matter of 24.3%. Again, these parameters define the coal as "Mid-Vol", low sulphur, high BTU coal, amenable to coking.
The Sewell Coal Seam
The Sewell Coal Seam, based on known county stratigraphy, occurs approximately 350 feet below the Iaeger Seam. There is no past production from this seam on the property, or known outcropping occurrences, such that its presence and delineation will require mapping and drilling to quantify. State wide the seam has an original reserve base of 6.3 Billion tons, and has been one of the major producing seams in West Virginia. Published state-wide data for the seam suggests a variable thickness of between 0 and 10 feet. Raw coal quality data (from Keystone) indicates a mean BTU value 14,700, a Sulphur Content of 0.6%, an Ash Content of 6.2%, and Volatility Matter of 20.8%. These parameters define the Sewell Seam as "Low-Vol", low sulphur, high BTU Coal amenable to coking.
The Beckley Coal Seam
The Beckley Seam, based on known county stratigraphy, occurs approximately 260 feet below the Sewell Seam. There is no past production from this seam on the property, or known outcropping occurrences, such that its presence and delineation will require mapping and drilling to quantify. State wide the seam has an original reserve base of 2.02 Billion tons, and has been a significant contributor to production in West Virginia. State-wide published data for the seam suggest a variable thickness of between 0 to 10 feet. Raw coal quality data (from Keystone) indicates a mean BTU value 14,110, a Sulphur Content of 0.7%, an Ash Content of 9.6%, and Volatility Matter of 17.7%. These parameters define the Beckley Seam as "Low-Vol", low sulphur, high BTU Coal amenable to coking.
The Fire Creek Coal Seam
The Fire Creek Seam, based on known county stratigraphy, occurs approximately 112 feet below the Beckley Seam. There is no past production from this seam on the property, or known outcropping occurrences as the seam is below drainage, and as such its presence and delineation will require drilling to quantify. State wide the seam has an original reserve base of 2.52 Billion tons, and has been a significant contributor to production in West Virginia. State-wide published data for the seam suggest a variable thickness of between 0 and 5 feet. Raw coal quality data (from Keystone) indicates a mean BTU value 14,600, a Sulphur Content of 0.8%, an Ash Content of 6.8%, and Volatility Matter of 18.4%. These parameters define the Fire Creek Seam as "Low-Vol", low sulphur, high BTU Coal amenable to coking.
Apart from the five seams discussed above, detailed stratigraphic mapping and previous mine-production in McDowell County suggest the potential for additional lesser seams within this 1,000 foot stratigraphic assemblage.
Local infrastructure is exceptional. The Dry Fork River forms the eastern boundary of the property, along which runs a paved highway, a regional rail line, and grid power lines. The small communities of Union City and Avondale are located along the highway on this eastern property boundary. Both communities, and the larger town of Iaeger, are historic coal mining centres, and coal mining continues as the largest local employer in the area. Importantly, only 1.5 miles north of the town of Iaeger, and 4.5 miles north of the property, Alpha Natural Resources, America's largest producer of metallurgical coal, has a large coal preparation plant and rail load-out facility at Litwar, West Virginia.
Endurance has initiated the permitting process in advance of a planned 5 to 6 hole, 5000 to 6000 foot diamond drilling program on the property. That program will determine the presence, areal extent and thickness of the targeted five seams, test the potential for other intermediary seams within the stratigraphic section, and provide detailed coal quality data. The drilling data will also provide initial rock quality data for the hanging and foot walls to the coal seams, and assist in preliminary engineering assessments of mineability.
Pending permitting progress, the drilling program is expected to commence in May, 2009.
Investors are cautioned that there are currently no known mineable reserves or defined mineral resources on the property. Similarly, the remaining areas of un-mined Douglas seam have not been adequately defined in terms of historic thicknesses and geological/geotechnical mining constraints to determine if there is a reasonable expectation of profitable extraction. The property represents an exploration stage acquisition by the Company.
The Company is enthused about this opportunity. It represents a relatively low cost and low risk exploration project that offers the potential for quick definition of mineable reserves, and delivery of those reserves into the metallurgical coal market. While precise market price for metallurgical coal is largely subject to individual contract negotiation, similar quality coals mined in West Virginia and Virginia during 2007-2008 were selling in the $200 to $300 per ton range. While recent market conditions have resulted in an appreciable softening of that price, the longer term outlook for Central Appalachian metallurgical coal is positive. The opportunity for Endurance arose through the Company's coal connections at the Board and major shareholder levels. There is a possibility of expanding local exploration efforts to other projects in the area, as the Company moves forward with this program.
Duncan McIvor, P. Geo, is the Qualified Person as defined by National Instrument 43-101, and is responsible for the content of this news release.
ENDURANCE GOLD CORPORATION
President and Chief Executive Officer
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Endurance Gold Corporation
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