VANCOUVER, BRITISH COLUMBIA--(Marketwire - May 26, 2011) -
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Novadx Ventures Corp, President & CEO, Neil MacDonald, reports:
Novadx Ventures Corp. ("Novadx" or the "Company") (TSX VENTURE:NDX) announces that it and its wholly owned subsidiary MCoal Corporation ("MCoal") have executed a further amendment to the letter of intent with Ikerd Group of Companies ("Ikerd") previously announced July 6, 2010 and November 26, 2010. Pursuant to the terms of this amendment, the Company and Ikerd have agreed to extend closing of the acquisition of the Ikerd assets (the "Closing") until certain conditions are satisfied, including the approval of the TSX Venture Exchange, and in the interim, MCoal has assumed financial, administrative and mine management control of the operations of Ikerd. The Company also has agreed to further extend the loan facility previously announced March 10, 2011 to Ikerd Mining LLC, in order to fund current operations.
The Ikerd assets consist of four permitted surface coal mines and related mining equipment, stoker plant and rail load out facilities in eastern Kentucky. The first of these mines, the Flatwood's Mine, has operated since early 2009 producing a high quality thermal coal at an average rate of 25,000 tons per month. Production at this mine was idled at the beginning of May 2011 awaiting the issuance of a KPDES permit in connection with a new mine area which has been fully developed and is ready to be mined. MCoal anticipates that this KPDES permit will be issued by early June and has developed mine plans to begin mining this new area immediately upon the KPDES permit issuance at historical production rates. All other permits necessary to recommence mining operations at Flatwoods are already issued.
In anticipation of recommencing operations, MCoal has assumed management control of the Ikerd operations and is being designated as operator under Ikerd's mine permits. Subject to satisfaction of certain conditions precedent, MCoal intends to close this acquisition prior to the end of June, 2011 and has received an extension from Sandstorm Metals and Energy Ltd ("Sandstorm") until June 30, 2011 to close this transaction. Pursuant to a Coal Production Payment Agreement with Sandstorm previously announced on November 26, 2010, MCoal has received and aggregate US$30 million in up front deposits against future coal production from Rosa and Rex Mines and expects to receive an additional US$8 million up front deposit upon closing of the Ikerd asset acquisition.
In addition to recommencing operations at the Ikerd Flatwoods Mine, MCoal is evaluating plans to commence production of thermal coal at a second Ikerd surface mine known as the Elk Creek Mine following closing of the Ikerd acquisition. All permits, road access, initial mine development and equipment necessary to commence operation of the Elk Creek Mine are in place.
MCoal has commenced construction of a wash plant at the Rosa Mine site, and in anticipation of operating this facility MCoal has been stockpiling raw coal over the past two months. A permit amendment allowing for operation of the wash plant has been applied for and is expected to be granted shortly. The operation of the new wash plant is expected to significantly increase recoveries and reduce transportation costs associated with toll washing the Rosa coal. While the wash plant is being constructed MCoal plans to continue mining operations and continue to stockpile coal until the new wash plant commences operations. Commissioning of the new wash plant is expected in the third calendar quarter of 2011.
Once the wash plant is operational, MCoal intends to increase production at Rosa through the implementation of a second auger machine. This machine has been ordered and delivery is expected in September, 2011. The addition of this second auger should allow MCoal to increase production at the Rosa Mine.
Rex No. 1 Mine:
MCoal has commenced development of the fully permitted Rex No.1 underground mine. MCoal has completed building new access roads to the existing mine works, leased additional surface area to accommodate a coal preparation facility at the mine entry area, prepared the mine entry area, purchased necessary underground mining equipment and is currently installing collars at the mine entries. Once collar installation is complete, MCoal plans to commence underground rehabilitation of mine entries and expects to commence production in third calendar quarter of 2011.
Neil MacDonald, President and CEO of Novadx and President of MCoal commented, "We are very pleased with our progress on plans to rapidly expand production at MCoal and establish the Company as a profitable and recognized participant in the US coal industry. To date, our Rosa and Rex No. 1 mine projects are proceeding within budgeted capital expenditures and time frames. We are now in control of operations at Ikerd and are confident that we can meet our objectives with this project as well. As a result of these initiatives and activities over the past few months, Novadx is well positioned to build shareholder value through meeting our goal of sustainable positive cash flow and achieving our aggregate mothly production targets by the end of 2011."
About Novadx: Novadx Ventures Corp. is a Vancouver based mining investment company. Novadx's primary focus is to invest its capital to acquire and develop companies with active or near production high quality coal reserves in the US Appalachia coal region. Novadx intends to continue to grow the value of its coal investments through expanding production and reserves amongst its existing investments and by investing in additional acquisitions. Novadx is actively evaluating a number of high quality coal acquisition opportunities. For more information please visit www.novadx.com.
About MCoal: MCoal Corporation is a wholly-owned subsidiary of Novadx Ventures Corp. which operates the Rosa coal mine in Blount County, Alabama and is developing the Rex No.1 coal mine in Campbell County, Tennessee.
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.
This release contains "forward-looking information" that is based on Novadx's expectations, intentions, plans, beliefs, estimates and projections as of the dates as of which those statements were made. This forward-looking information may include, among other things, statements with respect to future production at the Company's operating mines and other operations. Generally, this forward-looking information can be identified by the use of forward-looking terminology such as "outlook", "anticipate", "project", "target", "believe", "estimate", "expect", "intend", "should", "scheduled", "will", "plan", "would" and similar expressions. Forward-looking information is subject to known and unknown risks, uncertainties and other factors that may cause Novadx's actual results, level of activity, performance or achievements to be materially different from those expressed or implied by such forward-looking information and is developed based on assumptions about such risks, uncertainties and other factors, including but not limited to changes in commodity prices; the strength of the United States economy; the effects of competition and pricing pressures; the oversupply of, or lack of demand for, the Company's products; currency and interest rate fluctuations; various events which could disrupt the Company's operations; the Company's ability to obtain additional funding on favourable terms, if at all; and the Company's ability to anticipate and manage the foregoing factors and risks. Additionally, statements related to the quantity or magnitude of coal deposits are deemed to be forward looking statements. The reliability of such information is affected by, among other things, uncertainties involving geology of coal deposits; uncertainties of estimates of their size or composition; uncertainties of projections related to costs of production; the possibilities in delays in mining activities; changes in plans with respect to exploration, development projects or capital expenditures; and various other risks including those related to health, safety and environmental matters. Although Novadx has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking statements, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that forward-looking statements will prove to be accurate. Accordingly, readers should not place undue reliance on forward-looking statements. Novadx disclaims any intent or obligations to update or revise publicly any forward-looking statements whether as a result of new information, estimates or options, future events or results or otherwise, unless required to do so by law.
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.