American Resources Corp., through its wholly owned subsidiary Quest Energy Inc. and McCoy Elkhorn Coal LLC, has commenced development of its permitted Carnegie 2 coal mine within the Alma coal seam, located in Pike County, Kentucky. Carnegie 2, which will be sold in the high vol A/B metallurgical markets, is a green-field operation that will be mined as a room-and-pillar underground operation. Similar to the company’s Carnegie 1 mine in the same coal seam, which recently commenced production, Quest Energy is anticipating a cost structure that is sub-$55 per ton.
The portal location of the Carnegie 2 mine is geographically located near Quest Energy’s McCoy Elkhorn Coal Bevins Branch processing and load-out facilities, enabling cost-effective logistics, processing and blending capabilities. Both the Carnegie 1 and Carnegie 2 mines fit within Quest Energy’s hub-and-spoke model of aggregating mining operations around a centralized processing and transportation hub, in this case that of McCoy Elkhorn Coal LLC. Carnegie 1 and Carnegie 2 production will be sold on a stand-alone basis and combined with the company’s Mine 15 coal in the Glamorgan/Millard coal seam. Quest Energy is actively working to bring other coal mines within its regional McCoy Elkhorn Coal operating complex in production, which will further reduce operating costs at McCoy Elkhorn Coal.
“After we were able to get our Carnegie 1 mine into production and under budget, we are excited to begin development on Carnegie 2 mine,” said Mark Jensen, CEO of American Resources Corp. “Our team prides itself on operating under a culture of safety and efficiency which enables the company to compete in all markets. Our ability to be a low-cost producer in the metallurgical and specialty market is tied to the hard work of our employees and our corporate culture.”
The company is currently performing underground face-up work at Carnegie 2 and anticipates the initial development to take approximately 60 days, with infrastructure and equipment moving on-site shortly thereafter. If the weather cooperates during this initial phase, the company anticipates producing coal at this location within 90 days from the beginning of development.