America West Resources Signs $6.6 Million Coal Supply Contract with California Co-Gen Plant

America West Resources Signs $6.6 Million Coal Supply Contract with California Co-Gen Plant

America West Resources, Inc., a domestic coal producer with mining operations in Central Utah, today announced that the Company has signed a Coal Supply Agreement with a major U.S. energy company providing for the delivery of bituminous coal mined from America West’s Horizon Coal Mine for use in a co-generation power plant based in California. The $6.6 million deal, which expires on December 31, 2009, provides for contracted minimum pricing per ton based on an average caloric value of 11.500 Btus/lb. Pursuant to coal quality considerations and a standard market index, the price per ton may be subject to upward or downward adjustment.

The customer also retains the right to purchase additional coal tonnage in 2009 that could yield up to another $4.75 million in sales to America West at the prevailing contracted price per ton.

“Presuming we are successful at optimizing our production capabilities through 2009 at Horizon, this new contract, in combination with the contract we announced in July, could represent more than $32 million in revenues to our Company over the next 16 months,” stated Dan Baker, Chief Executive Officer of America West Resources. Continuing, he noted, “This will go a long way in helping our Company to achieve our near term top and bottom line objectives, while generating strong positive cash flow that can be leveraged to begin development of the metallurgical coal assets on our new Columbia leasehold.”

Headquartered in Salt Lake City, Utah, America West Resources, Inc. is an established domestic coal producer focused on the mining of clean and compliant (low-sulfur) coal and its sale primarily to U.S. utility companies for use in generating electricity. Since 2003, the Company has extracted over 1.3 million tons of coal from its owned and operated Horizon Coal Mine based in Central Utah. For more information, please visit .

Share this post