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Thursday, February 9, 2012

Liberty Coal announces coal mine acquisition in Kentucky

Thursday, 09 Feb 2012

Liberty Coal Energy announced that on February 1st 2012, the Company entered into a letter of intent for the acquisition of private mineral leasehold rights to a certain coal mining property in Owsley County, Kentucky with AMS Development LLC and Colt Resources, Inc.

In consideration for the Letter of intent, Liberty will pay USD 20,000 within 5 days of the date of the Agreement, which will give Liberty 45 days to complete its due diligence, which is well underway. If the Company elects to proceed to development at the end of the due diligence period, it will pay an additional USD 60,000 to purchase the rights to the existing mining permit.

The Owsley property comprises approx 1000 acres of fee surface and coal rights, and has a mine plan in place and a phase 1 permit technically approved by the Kentucky Department of Natural Resources. The permit may be activated by posting the required reclamation bonds and liability insurance.

The surface mineable recoverable coal resource on the project is in excess of 2.6 million short tons. The coal mineable by augur methods is in excess of 950,000 short tons. An additional 2.2 million short tons are recoverable by deep mining, however underground coal is not part of the existing permit.

As part of the Agreement, the Company has agreed to enter into lease and royalty agreements with AMS Development LLC and Colt Resources, Inc., pursuant to which AMS and Colt would receive a royalty of USD 5.00 per tonne. Performance and minimum royalty provisions will apply.

Mr Ed Morrow president of Liberty said that "We are pleased to have access to this advanced project. We believe the project can be in production in approximately 90 days after ground breaking. We project initiation of development in Spring 2012."

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