Novadx Ventures Corp.
TSX VENTURE : NDX

Novadx Ventures Corp.

September 08, 2010 08:30 ET

Novadx Enters Into Option Agreement to Acquire Mineral Rights to a Historical Estimated 172 Million Ton, 18,000 Acre, Metallurgical Coal Prospect

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Sept. 8, 2010) - Novadx Ventures Corp. (TSX VENTURE:NDX) ("Novadx") -

Neil MacDonald, President & CEO of Novadx, reports: Novadx is pleased to announce that its wholly owned subsidiary, MCoal Corporation ("MCoal") has entered into an option agreement dated August 12, 2010 (the "Option Agreement"), to acquire a mineral deed (the "Deed") from The Miami Land Company, of Chattanooga, Tennessee (the "Optionor"). The Option Agreement represents an estimated 172 million ton, 18,000 acres coal prospect within the historical coal-mining district adjacent to Nickajack Gulch in Dade County, Georgia, USA ("Dade Prospect").

The Dade Prospect consists of four coal beds known as the Aetna, Dade, Rattlesnake and Mill Creek. MCoal is particularly interested in the Aetna and Dade seams comprised of low and mid-volatile matter, high-quality coking coal which could be potentially mined via both surface and underground mining methods. A detailed analyses of the Aetna and Dade seams conducted by Nerco Coal Company ("Nerco") in 1983, is shown in the following table. Results for the Rattlesnake and Mill Creek seams are extrapolated from a non National Instrument ("NI") 43-101 compliant technical report prepared in 1926 for Mr. B.W. Newsom.

Seam Name Aetna Dade Rattlesnake Mill Creek
Historical Estimated Tons 23,000,000 50,000,000 39,000,000 60,000,000
         
Moisture 5.65% 5.52% 1.02% 0.92%
Volatile Matter 22.23% 25.63% 24.90% 22.30%
Fixed Carbon 63.53% 65.21% 67.02% 64.60%
Ash 8.59% 3.64% 5.97% 12.18%
Sulphur 0.82% 0.94% 0.98% 0.72%
BTU 13,632 14,357 n/a 13,761
         
FSI 9 9 n/a n/a

No recent work has been done on the Dade Prospect to classify the above mentioned historical tonnage estimates as a current mineral resource as defined in section 1.2 and section 1.3 of NI 43-101. The resource estimates are therefore historical estimates only and therefore cannot be relied upon.

MCoal intends, within the next 18 months, to develop and implement an exploration plan with the goal of bringing the historical estimates into a NI 43-101 compliant resource estimate. MCoal has engaged McGehee Engineering to review the historical data related to the Dade Prospect and to produce exploration recommendations to provide the necessary information to prepare a NI 43-101 technical report and to delineate the highest priority targets for permitting and mining in the future.

Neil MacDonald, CEO of MCoal and President and CEO of Novadx commented, "This transaction represents a further step in our strategy to grow the coal business of MCoal through acquisition of both production and reserves of high quality coal. The Dade Prospect fits our focus in metallurgical and specialty coals and will contribute to our objective to build our production of these coals over the next 3 to 5 years."

The Option Agreement: Pursuant to the terms of the Option Agreement, MCoal has purchased for the sum of US$75,000 the exclusive and irrevocable option to acquire, for a total sum of US$2,100,000 the Deeds for the Dade Prospect up to or before January 25th, 2012. During this period, MCoal will have the right to conduct such exploration as deemed necessary to develop a NI 43-101 compliant technical report that would substantiate the exercising of the option.

In association with the Option Agreement, Novadx has also entered into a separate but parallel compensation agreement dated August 14, 2010 (the "Compensation Agreement"), with Southern Energy Development Co. Inc., and Mr. Roy Dobbins (the "Consultants") for and in consideration of the work undertaken by the Consultants to negotiate and develop the Option Agreement for MCoal, and for future works undertaken as part of the exploration and due diligence process. Under the terms of the Compensation Agreement, the Company has agreed, subject to the approval of the TSX Venture Exchange, to issue 300,000 common shares at a price of $0.19 per share of Novadx to the Consultants in connection with the execution of the Option Agreement. Upon completion of a NI 43-101 technical report demonstrating a coal resource of not less than 20 million tons in place on the Dade and Aetna seams within the Dade Prospect, and of sufficient quality and thickness to be conventionally mined, Novadx agrees to issue a further 400,000 common shares. Upon exercising of the Option Agreement, MCoal will make a final payment (payable, subject to approval of the TSX Venture Exchange, in shares based on an average 10 day share value on the date that the option is exercised) to the Consultants equal to US$6,000,000 less US$75,000 (being the option purchase price), $2,100,000 (being the option exercise price) and up to US$1,000,000 in exploration costs.

About the Dade Prospect: The Dade Prospect consists of four coal beds known as the Aetna, Dade, Rattlesnake and Mill Creek. The four coal beds are of Carboniferous age and occur at different levels within a well-stratified horizontal succession of sandstone and shale known as the "Lookout Sandstone". The individual coal seams are flat lying with local dips and warps. This unit conformably overlies a 500 ft thick sequence of limestone known as the "Bangor Limestone", also of Carboniferous age.

The Dade Prospect was mined on a small scale for metallurgical coal in the late 1800's and early 1900's but to the Company's knowledge, no recorded mining of the Dade Prospect has occurred since the late 1930's. The above mentioned report outlines a historical estimate of an aggregate of 172 million tons of coal in place. In total, 117 historical holes have been drilled on the Dade Prospect since the early 1900's. The surrounding area hosts the remains of numerous old "bee hive" coking ovens evidencing the metallurgical coal qualities of certain of the seams.

Sanford Hendon, P.Eng., is MCoal's Qualified Person, as defined by National Instrument 43-101 has supervised the preparation of this news release.

About MCoal: MCoal is a wholly-owned subsidiary of Novadx 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. For more information please visit www.novadx.com.

ON BEHALF OF THE BOARD

Neil MacDonald, President and 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.

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