American West Resources to ramp up thermal coal production at Horizon mine

Source: America West Resources, Inc.

America West Resources, Inc. (OTC BB: AWSR), a domestic compliant coal producer with mining operations in Central Utah, announced that it has taken delivery of a new continuous miner and has immediately commenced its deployment in a second section of the Horizon Mine, the Company's compliant coal mining operation located 12 miles outside of Helper, Utah – about 120 miles southeast of Salt Lake City in Carbon County. 

A continuous miner is a 60-ton machine with a large rotating steel drum with tungsten carbide bits that cut coal from the coal seam. Operating in a "room and pillar" system – where the mine is divided into a series of rooms, or work areas cut into the coalbed – it can mine as much as five tons of coal a minute. For the past two years, America West has utilized continuous mining in one section of Horizon, averaging approximately 25,000 tons of compliant thermal coal per month. With the arrival of the second continuous miner, the Company expects to immediately commence deployment of the new miner in a second section of Horizon, which is expected to increase total monthly production to approximately 60,000 tons once the new continuous miner reaches fully operational status. Based on the Company's prevailing deployment strategy, the new miner should be operating at optimal capacity by the end of March 2011. At the 60,000 ton monthly production level, it is anticipated that America West will become cash flow positive. 

With its coal sales backlog requiring production of nearly $200 million in coal over the next five years, and up to $500 million over the next decade, America West's management team has been implementing several key initiatives designed to strategically and methodically execute a mine development plan capable of optimizing its valuable thermal coal assets. John Thomas Financial, an independent broker dealer headquartered in New York City, assisted America West in accessing the capital required to purchase the new continuous miner. 

According to Dan Baker, President and CEO of America West, "Demand for our compliant coal is at an all-time high, so it is crucial that we stay on plan to ensure that we are in a position to effectively address our customers' needs. Over the next several months, we expect to expand our room and pillar operations to provide for three sections being mined simultaneously. In addition, we will strive to introduce a longwall mining system in late 2011 to significantly escalate our production levels to the point where we are safely extracting hundreds of thousands of tons of coal per month. Of course, that presumes that we prove successful in our efforts to secure necessary growth capital and equipment financing." 

Continuing, Baker added, "We are currently in active discussions with a number of strategic funding sources and hope to have a comprehensive capital formation plan finalized by the second quarter of this year."

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