Do the stated coal reserves actually exist? Doubtful, since I checked out that claim today....
I e-mailed the West Virginia Geological and Economic Survey Office today, asking them the following:
<<<<Mountain Energy (MTEI), claims the following on its land (plus land it owns mineral rights on) in West Virginia:
The company said in a press release:
"Mountain currently owns 30 separate properties in West Virginia with
approximately 1,300 acres owned in fee and an additional 1,300 acres of mineral rights. Reserve estimates by the U.S. Geological Survey (''U.S.G.S.'') indicate in excess 10,000,000 tons bituminous coal. This low sulfur, low ash content, high BTU, clean burning currently sells for $25-$28 per ton. With cost of mining and transportation estimated at $11-$15 per ton, this will show a $10 per ton conservative net profit, (representing maximum cost to mine and minimum selling price), providing net asset value in excess of $100,000,000, with a potential of $170,000,000. The U.S.G.S. estimates also indicate in excess of 2 billion cubic feet of coal methane gas. This gas currently sells in excess of $3.00/MCF 1000 cubic feet. In most cases this gas is subject to an alternate fuel tax credit in excess of $3 MCF, for an estimated value of $5/MCF valued at $10,000,000.
A separate reserve study has been commissioned by Independent Reservoir and Mining Engineers to arrive at a realistic present net asset value. History indicates that U.S.G.S. estimates usually represent 25 percent to 40 percent of actual minerals in place. The Company continues to acquire additional acreage in the area."
A) Is it true that the USGS estimates greatly underestimate the minerals in place?
B) Has Mountain Energy requested a breakdown from your office of the minerals projected to be under your property... and do the figures match those listed above? Question such as that from your web page:
*Is there minable coal under my land? How much? How deep?*
In short, do the company claims make sense, based on your surveys?>>>>
I received a swift reply from the West Virginia Geological Survey office:
In answer to your questions about this press release:
A.) My experience with the USGS proedures (which we also use in this office) is such that I would be really suprised if they consistantly found only 1/4 to 2/5 of the coal actually present. Preliminary estimates using available data are necessarily rough but we aim to be within 25% of the amount later mined.
B.) Mountain Energy has not contacted us.
As stated in the press release with no further details available
as to location or reference to the studies they cite incompletely (so
that I cannot check their claims against our records)
Mountain Energy's claims do not make sense to me at this time.
-Steven McClelland |
