Stocks & Investing
Stocks and Investing
Stocks and Investing
Thu, June 24, 2010
Wed, June 23, 2010 Novadx Announces Letter of Intent to Aquire 14,430 Acres of Permitted Coal Mine Project
VANCOUVER, BRITISH COLUMBIA--(Marketwire - June 23, 2010) - Novadx Ventures Corp. President & CEO, Neil MacDonald, reports: Novadx Ventures Corp. (TSX VENTURE:NDX) ("Novadx") is pleased to announce that its wholly-owned subsidiary, MCoal Corporation ("MCoal") and Novadx have entered into a letter of intent with Tiacme LLC ("Tiacme") to acquire all the outstanding membership units of Tiacme in consideration of US$5 million payable as to US$2.5 million in cash and US$2.5 million in shares of Novadx priced at the 10 day weighted average trading price prior to closing less a 10% discount. Tiacme's sole asset is the Rex No. 1 coal mine (the "Rex No.1 Mine") located on the border of Kentucky and Tennessee in the Columbian Mountains. The Rex No. 1 Mine was fully permitted and bonded in the fourth quarter of 2008. An independent technical report (the "Gress Report"), prepared by Gress Engineering Corp. for Tiacme in May 2009, estimated that 14,430 acres of the Rex No. 1 Mine property contains 32.20 million tons of measured and indicated, and 27.64 million tons of inferred (1) "Rex" coal resources (1). MCoal has engaged Gress Engineering Corp. to prepare a technical report that defines the Rex No. 1 Mine coal resources in accordance with National Instrument 43-101, "Standards of Disclosure for Mineral Deposits" ("NI 43-101") which Novadx intends to file with the regulatory authorities within 45 days of the date of the news release. The mineral and necessary surface rights required to mine the Rex coal seam are controlled by Tiacme through a 25 year lease dated September 18, 2007 and encompassing approximately 31,000 acres. The Rex No. 1 Mine has not yet commenced production. Upon closing of the acquisition, MCoal intends to initiate the necessary steps to commence coal production at the Rex No. 1 Mine.
The Gress Report (1) provides a quantitative estimate of the Rex No. 1 Mine coal resources contained in 14,430 acres controlled by Tiacme which are summarized in the following table:
| Seam Thickness Interval | Measured (million tons) | Indicated (million tons) | Total M & I (million tons) | Inferred (million tons) |
| 24"-30" | 5.14 | 10.13 | 15.27 | 24.40 |
| 30"-36" | 6.02 | 8.85 | 14.87 | 3.24 |
| 36"-42" | 1.62 | 0.44 | 2.06 | |
| Totals | 12.78 | 19.42 | 32.20 | 27.64 |
No work has been done more recently to classify the above mentioned coal resource estimate as a current mineral resource as defined in section 1.2 and section 1.3 of NI 43-101 and it is treated as an estimate only and therefore cannot be relied upon.
Based on historical and recent drill core assaying and wash testing, the quality of the Rex No. 1 Mine coal seam is summarized as follows:
| As received (Dry Basis) | Washed (Dry Basis) | |
| Ash % | 4.88 | 1.90 |
| Volatiles % | 38.31 | 39.25 |
| Fixed Carbon % | 56.81 | 58.85 |
| Sulphur % | 0.92 | 0.77 |
| BTU/lb | 14,358 | 14,850 |
| Iron Oxide % | 0.55 | 0.24 |
| Titanium Oxide % | 0.046 | 0.007 |
The Rex seam has been mined in the area surrounding the Rex No. 1 Mine since the early 1900's and has traditionally been sold as a metallurgical coal. Since 2004, the Rex coal has been sold primarily for the production of silicon metal due to its high quality and low iron and titanium content.
Neil MacDonald, President and CEO of Novadx and CEO of MCoal, commented, "This is a unique opportunity for MCoal as it will allow the Company to enter the silicon metal coal market, complementing the metallurgical and activated carbon markets we are currently servicing with the Rosa Mine. This acquisition will bring us another step closer to our goal of becoming a mid tier specialty coal company. In recent years, coals of suitable quality for this market have been in short supply and as a result the price of these coals has risen to levels commensurate with high quality metallurgical coals, a trend we expect will continue." Mr. MacDonald further commented, "We are fortunate to be acquiring a project that is fully permitted and bonded with mineable coal resources. Once we complete the acquisition of the Rex No.1 Mine we intend to immediately start bringing the mine into production."
The Rex No. 1 Mine is located between Cumberland Mountain and Pine Mountain within the Cumberland Mountain section of the Appalachian Plateau on the Cumberland overthrust sheet (or block). The dominant structural feature of the Cumberland Block within the vicinity of the property is the Middleboro syncline which hosts relatively flat lying Pennsylvanian-age coal bearing rocks. The Rex seam occurs within the Crooked Fork Group and is stratigraphically the lowest of all the commercially important coals generally 40 to 100 feet above the top of the Rockcastle conglomerate, which is the top of the Crab Orchard Mountains Group. Individual coal seams are flat lying with approximately one degree dips, but the dips can increase to as much as 10 degrees when approaching the edges of the syncline area.
The Rex No. 1 Mine is well serviced with the Norfolk and Southern railroad and US highway 25, on the eastern edge of the property, and numerous secondary and private haulage roads. On November 12, 2008, Tiacme posted a reclamation bond and was awarded SMCRA Permit No. 3216 for the Rex No. 1 Mine by the United States Department of the Interior, Office of Surface Mining (OSM). On December 10, 2008, Tiacme was awarded NPDES Permit No. TN0052027 by the State of Tennessee, Department of Environment and Conservation for the Rex No. 1 Mine. Detailed descriptions of the property are given in Gress Report (1) for Tiacme in May 2009.
Closing of the acquisition remains subject to certain conditions including settlement of the terms and conditions of a definitive agreement, MCoal demonstrating sufficient capital financing to commence production, MCoal being satisfied with the results of its due diligence review, and the approval of the TSX Venture Exchange, amongst other conditions.
This news release has been prepared under the supervision of George Smith, P Eng., of Gress Engineering Corp. and author of the Gress Report. Mr. Smith is a Qualified Person as defined by National Instrument 43-101 and is independent of Novadx and MCoal.
Note (1): All references to the Rex Coal resources contained in this press release are reproduced from an independent report prepared by Gress Engineering Corp (Bluefield, VA) for Tiamce LLC in May, 2009 which by reference includes the content of an independent report prepared by Innovative Reclamation Technologies & Engineering CO., Inc. (Caryville, TN) for Tiacme in October 2007 in addition to a reports prepared by Gaddy Engineering (Huntington, WV) in 1982, Kenwill, Inc. (Maryville, TN) in 1980, amongst others. Although the Gress Report was prepared utilizing commonly accepted U.S. engineering principles and practices, it has not been prepared in accordance with National Instrument NI 43-101 "Standard of Disclosure for Mineral Deposits". In addition MCoal:
Has not done the work necessary to verify the classification of the coal resource outlined in this Gress Report;
Is not treating the coal resource outlined in the Gress Report as a NI 43-101 defined resource or reserve verified by a Qualified person, and
The coal resource outlined in the Gress Report should not be relied upon.
MCoal has engaged Gress Engineering Corp. to produce a technical report that defines the Rex No. 1 Mine resources in accordance with the requirements of NI 43-101. A copy of the current Gress Report is available for viewing in the Novadx Offices.
About MCoal: MCoal Corporation is a wholly-owned subsidiary of Novadx Ventures Corp. and operates the Rosa Coal Mine. The Rosa Mine is a metallurgical coal mine located in Northern Alabama, approximately 40 miles north of the City of Birmingham. In addition to operating the Rosa Mine, MCoal is actively evaluating a number of high quality coal acquisition opportunities in the Appalachian coal region to increase its reserves and production.
About Novadx: Novadx is a Vancouver-based Investment Company whose primary focus is on providing merchant banking services to natural resource companies. Novadx structures and makes direct equity investments as a principal and provides management and other related services to companies in specific resource sectors, such as MCoal Corporation, a subsidiary company currently permitting a metallurgical coal mine in the State of Alabama, USA. For more information please visit [ www.novadx.com ].
ON BEHALF OF THE BOARD
Neil MacDonald, President, CEO and Director
This press release shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of these securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to the qualification under the securities laws of such jurisdiction.
Statements included in this announcement, including statements concerning our plans, intentions and expectations, which are not historical in nature are intended to be, and are hereby identified as, "forward-looking statements" for purposes of the safe harbor provided by Section 21E of the Securities Exchange Act of 1934, as amended by the Private Securities Litigation Reform Act of 1995. Forward-looking statements may be identified by words including "anticipates", "believes", "intends", "estimates", "expects" and similar expressions. The company cautions readers that forward-looking statements, including without limitation those relating to the company's future operations and business prospects, are subject to certain risks and uncertainties that could cause actual results to differ materially from those indicated in the forward-looking statements.
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release. The TSX Venture Exchange has in no way passed upon the merits of the proposed transaction and has neither approved nor disapproved the contents of this press release.
