SALT LAKE CITY, UT - Dan Baker, Chief Executive Officer of America West Resources, Inc., a domestic compliant coal producer with mining operations in Central Utah, said, "Since successfully emerging from bankruptcy in December and completing a $5.2 million equity financing in January, America West has been squarely focused on executing a series of planned strategies designed to:
overcome historical equipment challenges;
materially increase monthly coal production from our Horizon Mine;
continue to expand our base of recoverable coal reserves; and
strengthen our operating platform through pronounced revenue growth, strong positive cash flow and sustainable profitability.
"Despite our efforts to boost monthly production at Horizon in the Spring of 2009 we have encountered a series of unforeseen challenges, including artesian water in one section of the mine, unusual MSHA mandates, and equipment breakdowns. These challenges have compromised our ability to scale production on any consistent or meaningful basis. Over the last several months, we have averaged approximately 10,000 tons per month. However, it is our goal to ramp up to 40,000 tons by late 2009. We have ordered new equipment, which is expected to be delivered in May. Upon receipt of our new equipment, we plan to actively mine two sections simultaneously. Moreover, we also plan to lease and deploy a third continuous miner and other related equipment to allow us to operate as a three section mine - a key objective we plan to achieve yet this year.
"In March 2009, we received an estimate from a third party engineering firm confirming that there were approximately 5.6 million tons of recoverable reserves in our Horizon Mine as of the end of 2008. This is up from an original estimate of 4.8 million tons, which was indicated in an earlier study conducted in 2007. The increase was largely due to an assumption in the prior year's engineering report that the main entry pillars would not be recovered. However, based on our current mining plan, these pillars are being recovered - a trend that we expect will continue.
"I'm also very pleased to confirm that last month the Bureau of Land Management (BLM) granted America West a lease modification to access and lease reserves adjacent to the Horizon Mine. Based on our third party engineering report, this lease modification adds another 6.8 million tons in estimated recoverable reserves, increasing our reserve base to 12.4 million tons. Although we consider these reserves probable, estimates are subject to revision as actual mining activity reveals accurate information about coal seams, thickness, quality of coal and obstacles to mining, such as faults or rock intrusions into the seam.
"Demand for our compliant steam coal remains at an all-time high from both existing and prospective customers, both in the
The company’s address is 57 West 200 South STE 400,