American Resources Corp.’s Carnegie No. 2 metallurgical coal mine, located in Pike County, Kentucky, is on track to be completed and ready for production in six to seven weeks, according to the company. American Resources has been developing Carnegie No. 2 over the past year with the expectation of using a portion of the capital raised from the company’s August 23 equity financing to complete the mine’s development and bring it into production. Once complete, it is anticipated that American Resources will use a contractor that already operates the Carnegie No. 1 deep mine.
American Resources estimates production to begin at Carnegie No. 2 in mid-to-late November, and once producing, expects it to produce an estimated 8,000 to 10,000 salable tons per month.
Carnegie No. 2 approximately five miles from the company’s McCoy Elkhorn complex and accesses the same boundary of high vol A/B coal, an essential ingredient in the steelmaking process, as the company’s Carnegie No. 1 mine, both within the Lower Alma seam.
“We are proud of the progress our development team at Carnegie No. 2 has made to date,” said Mark Jensen, chairman and CEO of American Resources. “We are also very excited about the addition of Carnegie No. 2 in supplementing our overall metallurgical [coal] production, which will allow us to enhance our blending capabilities and provide a premium product to our customers. The quality of our Carnegie [coal] enables us to expand the [met sales] volumes, further increasing the company’s revenues and margins.”
As in the past, all production at the Carnegie mines will be trucked to the company’s McCoy Elkhorn facility to be processed and loaded onto rail.
Additionally, the enhanced production will give American Resources the ability to blend the coal from its Carnegie mines with other metallurgical production at McCoy Elkhorn to offer its customers an attractive high-vol met coal product, according to the company. As a result of the increased tonnage, the fixed operating costs at the McCoy Elkhorn processing and load out complex will further be reduced on a per ton basis, providing further margin expansion.
