Benjamin Hill Mining Enters LOI For Investment In Thermal Coal Project
Benjamin Hill Mining Corp (CSE: BNN) is stepping out its comfort zone to invest in a thermal coal operation that is based in Colombia.
The firm this morning entered into a non-binding letter of intent to acquire a 20% stake of Aion Mining Corp, whom holds a fully-permitted coal project in Colombia.
Aion Mining currently holds an option agreement on 548 hectares of land in the Santander region, which is estimated to have over 18 million tons of coking and thermal coal reserves, based on Aion’s public statements. The property is said to contain eight known seams of coal based on historic drilling and surface exposures, with the property approved for a mining plan consisting of production of up to 180,000 tons per year.
The company’s website claims that annual revenue is projected at $29.7 million by year 3 of operations, however it is unclear how this number was derived, while a vague project timeline suggests mining could be operational within six months time. How this data was generated however is again unclear.
The 20% interest meanwhile was acquired for a sum of just $1.125 million, $600,000 of which is payable in cash, while the remainder is to be paid in common shares.
“Benjamin Hill is excited to have the opportunity to work with a highly skilled Colombian mining team to develop a coal asset with a path to generating revenue. There is a solid indication demand for coal assets in the global market will remain strong, as clean thermal technologies continue to emerge, while over 70% of the world’s steel is currently produced using coal. As a measure of the appetite for coal projects, just yesterday, we saw Teck sell its coal interests to Glencore, Nippon Steel Corp., and Posco Holdings for $8.9 billion,” commented CEO Cole McClay.
However, it should be noted that McClay is also the President of Aion Mining, while Lorne Warner, President of Benjamin Hill and the qualified person for the company, is a special advisor to Aion.
Benjamin Hill Mining last traded at $0.42 on the CSE.
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