Corsa Announces Option Agreement on Alumbaugh Property
December 20, 2010
Toronto, Ontario – Corsa Capital Ltd. (TSXV: CSO) is pleased to announce that it has entered into an agreement that provides its subsidiary with an option, for 120 days, to acquire the rights to mine all coal seams under 5,643 acres in Jenner, Quemahoning, Lincoln, and Somerset Townships in Somerset County, Pennsylvania referred to as the Alumbaugh property.
The property is immediately adjacent to the Company’s existing Acosta Deep underground reserve which contains 5.7 million recoverable tons of metallurgical coal reported as probable reserves in the Amended and Restated Technical Report dated November 16, 2010 described below. The Acosta Deep reserve is in the Middle and Lower Kittanning coal seams and the option is to acquire rights to mine those coal seams on the Alumbaugh property as part of the Acosta Deep mine reserve project. In addition to these seams the option exists to mine three additional coal seams: the Upper Freeport, Lower Freeport , and Upper Kittanning.
The property has been the subject of previous drilling on all five coal seams, by other companies. Corsa management has reviewed this drilling which was incorporated into reports by various consultants who have reviewed the property information and who made the following observations in those areas where the total seam thickness for the respective coal seams exceed 30”:
- Forty-six (46) drill holes in the Upper Freeport coal seam demonstrate an average total seam thickness of 42 inches.
- Thirty-nine (39) drill holes in the Lower Freeport coal seam demonstrate an average total seam thickness of 44 inches.
- Seventy-seven (77) drill holes in the Upper Kitanning coal seam demonstrate an average total seam thickness of 42 inches.
- Twenty three (23) drill holes in the Middle Kittanning coal seam demonstrate an average total seam thickness of 40 inches.
- Twenty-seven (27) drill holes in the Lower Kittanning coal seam demonstrate an average total seam thickness of 46 inches.
The Company intends to conduct further drilling and analysis to more fully explore the optioned property including each coal seam in addition to the Middle and Lower Kittanning. Insufficient exploration has been conducted on the property to define a mineral resource. The true thickness throughout the seams is not yet known. It is uncertain if further exploration will result in the target being delineated as a mineral resource.
In the event management elects to exercise the option, the purchase price would be a total of US$7 million of which US$3 million is payable on exercise and US$500,000 on each of the two anniversaries of the exercise (unless permitted earlier) and the balance in three equal annual installments commencing on the earlier of the date the property is permitted and the third anniversary of the exercise.
Don Charter the President and CEO of the Company stated “The Alumbaugh property has the potential to significantly expand the Company’s Acosta Deep project and we are looking forward to the results of our drill program.”
Corsa is a Canadian public company in the business of mining, processing and selling metallurgical coal as well as actively exploring, acquiring and developing resource properties consistent with its coal business, all currently located in Pennsylvania.
Dennis Noll of Earthtech, a qualified person, as such term is referred in National Instrument 43-101 Standards of Disclosure for Mineral Projects, has verified the drill hole data disclosed in this press release, and the mineral reserve estimate in respect of the Acosta Deep project has been prepared under the supervision of, and the technical information in this press release was approved by, Dennis Noll of Earthtech Inc.
A technical report prepared in accordance with National Instrument 43-101 entitled “Amended and Restated Technical Report on Coal Reserves and Resources; Wilson Creek Energy, LLC; Somerset, Cambria and Washington Counties, Pennsylvania and Garrett County, Maryland, USA, dated November 16, 2010” in respect of Wilson Creek’s material properties has been filed on www.sedar.com. The technical report describes the exploration history, geology and resources of the properties. Disclosure in this press release of mineral resources is based on the technical report. Details of the quality or grade of each category of mineral resources and key assumptions, parameters and methods used to estimate the mineral resources is included in the technical report. The technical report also includes a description of environmental and permitting matters.
For further information please contact:
Corsa Capital Ltd.
Certain information set forth in this press release contains “forward-looking statements” and “forward-looking information under applicable securities laws. Except for statements of historical fact, certain information contained herein constitutes forward-looking statements which include management’s assessment of future plans and operations and are based on current internal expectations, estimates, projections, assumptions and beliefs, which may prove to be incorrect. Some of the forward-looking statements may be identified by words such as “expects” “anticipates”, “believes”, “projects”, “plans”, and similar expressions. These statements are not guarantees of future performance and undue reliance should not be placed on them. Such forward-looking statements necessarily involve known and unknown risks and uncertainties, which may cause the Company’s actual performance and financial results in future periods to differ materially from any projections of future performance or results expressed or implied by such forward-looking statements. These risks and uncertainties include, but are not limited to: liabilities inherent in coal mine development and production; geological, mining and processing technical problems; the Company’s inability to obtain required mine licenses, mine permits and regulatory approvals required in connection with mining and coal processing operations; dependence on third party coal transportation systems; competition for, among other things, capital, acquisitions of reserves, undeveloped lands and skilled personnel; incorrect assessments of the value of acquisitions; insufficiency of exploration data; changes in commodity prices and exchange rates; changes in the regulations in respect to the use of coal; the effects of competition and pricing pressures in the coal market; the oversupply of, or lack of demand for, coal; currency and interest rate fluctuations; various events which could disrupt operations and/or the transportation of coal products, including labor stoppages and severe weather conditions; the demand for and availability of rail, port and other transportation services; and management’s ability to anticipate and manage the foregoing factors and risks. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. The reader is cautioned not to place undue reliance on forward-looking statements.
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. Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.