Atlantic Coal signs option on new US anthracite site

US focused aim listed miner Atlantic Coal rallied after it signed an option on a new US anthracite property that could more than double its anthracite reserves.

The lease option with Pennsylvania based Reading Anthracite is for a permitted 410 acre site in the Pennsylvanian Anthracitic Belt, 25 miles from where the group's existing Stockton Colliery is currently producing.

Managing director Steve Best said, "We are extremely pleased to have been able to secure an option on this major site. This agreement is in line with our growth strategy of expanding our regional footprint in this prime anthracite region, which has excellent infrastructure and established demand, and building Atlantic Coal into a major anthracite producer in the USA."

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Atlantic estimates that the site contains reserves of 12m tons Run of Mine with 4.1m tons of clean coal, which means the group could potentially more than double existing anthracite reserves.

Atlantic Coal's average sales price during November 2011 of anthracite in Pennsylvania was around $156 per ton.

Atlantic will pay $6m in cash and shares to RAC, subject to due diligence, and grant it $3m worth of warrants at 0.75p per share.

The group also said there is strong potential for building a commercial relationship with RAC, a US anthracite company.

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cj