Purchase and Restructuring of net profits interest - Announcement
NOVADX PROVIDES ROSA MINE UPDATE AND ANNOUNCES PURCHASE AND RESTRUCTURING OF NET PROFIT INTEREST
Novadx Ventures Corp, President & CEO, Neil MacDonald, reports:
(Vancouver, BC, June 2, 2010) Novadx Ventures Corp (TSX-V: NDX ) is pleased to report that production at the Rosa Mine operated by its wholly owned subsidiary MCoal Corporation (“MCoal”) is meeting mine production targets and that sales of cleaned coal have commenced.
MCoal has been operating the Rosa Mine since the week of April 19, 2010 and has recently commenced shipments to customers in both the coking coal and activated carbon businesses at prices of US$150 per ton. MCoal is currently operating one triple head auger for one shift per day and is processing mine run coal at a contract wash plant located near Jasper, Alabama for shipment to customers.
Neil MacDonald, CEO of MCoal and President and CEO of Novadx commented, “Although we have experienced a couple of start up challenges we are pleased with progress at the Rosa Coal Mine. The auger machine is now regularly achieving our daily footage targets and is producing a mine run coal quality that is meeting expectations. The washed Rosa coal we are producing is meeting the high quality expectations of our customers who are very satisfied with it. We have more demand for this very special coal than we can currently fulfill without significantly expanding our mining operations.”
The Company also advises that it is currently experiencing lower than expected yields of wash coal at the processing plant. Mr. MacDonald further commented, “We have only been washing our coal for about 3 weeks now and although the quality of the washed product is very good, the yield of our coal in the fine coal recovery circuit is currently lower than expected. We understand why this is happening and are currently implementing steps to bring the yields to target levels.”
The Company also announces that it has made arrangements to put a second auger machine into production at the Rosa Mine site by mid June, 2010. “We are expecting the metallurgical coal prices to continue to rise for the foreseeable future,” commented Mr. MacDonald. “This fact, combined with the high demand we are experiencing for our Rosa coal, allows us to mine the Rosa coal deposit at a higher rate while maximizing the value of the depleted reserves. Training of our employees on the auger machines is ongoing and we expect to be operating two shifts per day on each of these machines by the middle of July.”
Further to its news release dated April 19, 2010 the Company expects to produce over 20,000 tons/month or approximately 250,000 tons per year by operating 2 shifts per day on each of 2 auger machines.
The Company further announces that it has negotiated a buy back and restructuring of a 15% net profit interest in coal mined at the Rosa Mine from surface mining activities due to Mr. Fred Beane and his affiliates (collectively “Beane”) for assigning certain leased Rosa mine reserves to MCoal in October, 2008. Pursuant to the terms of the new deal, Beane has agreed to convert the 15% net profit interest to a 1% gross overriding royalty (“GOR”), subject to a maximum of US$2,400,000 in royalties being paid over the life of the mine, on all coal mined at the Rosa mine site in consideration of receiving a payment of 2,000,000 shares of Novadx. The GOR is also subject to a minimum monthly payment of $10,000 per month starting on the first month after MCoal commences processing of Rosa coal at a wash plant to be erected at the Rosa mine site.
Mr. MacDonald commented, “We are very pleased that Fred has accepted our offer to restructure the profit interest. The transaction greatly reduces the near term cash demands to service the profit interest, and more importantly, Fred, who has been fulfilling an instrumental role advising MCoal on numerous fronts including new acquisitions, is now well incentivised as a shareholder to continue his duties with us.”
The Company also announces that, subject to regulatory approval, it intends to settle approximately $266,000 in outstanding indebtedness through the issuance of up to 886,667 common shares at a deemed price of $0.30 per share. The shares will be subject to a hold period of four months from the date of issuance.
Sanford Hendon, P Eng., is MCoal’s Qualified Person, as defined by National Instrument 43-101. Mr Hendon has completed numerous site visits since December 2009 and has reviewed the content of this news release.
About MCoal: MCoal Corporation is a wholly-owned subsidiary of Novadx Ventures Corp., which operates the Rosa Coal Mine. The Rosa Mine is a metallurgical coal mine located in Northern Alabama, approximately 40 miles north of the City of Birmingham. In addition to operating the Rosa Mine, MCoal is actively evaluating a number of high quality coal acquisition opportunities in the Appalachian coal region to increase its reserves and production.
About Novadx: Novadx is a Vancouver-based Investment Company whose primary focus is on providing merchant banking services to natural resource companies. Novadx structures and makes direct equity investments as a principal and provides management and other related services to companies in specific resource sectors, such as MCoal Corporation, a subsidiary company currently permitting a metallurgical coal mine in the State of Alabama, USA. For more information please visit www.novadx.com.
Neil MacDonald
President and CEO and Director
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release 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. This press release shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of these securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to the qualification under the securities laws of such jurisdiction.
Statements included in this announcement, including statements concerning our plans, intentions and expectations, which are not historical in nature are intended to be, and are hereby identified as, "forward-looking statements" for purposes of the safe harbor provided by Section 21E of the Securities Exchange Act of 1934, as amended by the Private Securities Litigation Reform Act of 1995. Forward-looking statements may be identified by words including "anticipates", "believes", "intends", "estimates", "expects" and similar expressions. The company cautions readers that forward-looking statements, including without limitation those relating to the company's future operations and business prospects, are subject to certain risks and uncertainties that could cause actual results to differ materially from those indicated in the forward-looking statements.
For more information about Novadx Ventures Corp. please contact:
Neil MacDonald, President and CEO
(604) 633-2776 ext. 23
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