Full Metal Awarded Lease for Chickaloon Metallurgical Coal Prospectadmin
Wednesday, August 9th 2006
Full Metal Minerals (TSX VENTURE:FMM.V – News) is pleased to announce that it was notified by the Alaska Mental Health Trust that the Company has been awarded a coal lease covering 22,647 acres. The lease area includes Alaska’s only significant occurrences and past-producing operations of metallurgical coal. In the area of the Chickaloon Coal lease, the coals exhibit ranks ranging from high volatile “A” bituminous to semi-anthracite, with the rank of medium to low volatile bituminous being the dominant rank. The greater proportion of the Chickaloon area coals can be designated as being of high-value coking quality. One of its unique qualities is its Free Swelling Index (FSI) of 8, which makes it one of the highest grade coking coals in the United States according to literature accounts.
The Chickaloon Coal Lease area lies within the greater Matanuska Coal Field of south central Alaska. This coal field encompasses a structural trough that is approximately 64 kilometers long and eight to sixteen kilometers wide. The Property is located next to the Glen Highway, approximately 140 road-kilometers to the Point Mackenzie bulk loading facility located on the Pacific Ocean, and approximately 30 kilometers to the Alaska Railway. Upon Closure of the Lease Agreement, Full Metal will commence permitting for a drilling program during the autumn of 2006, in addition to surface mapping, sampling, and possibly geophysics.
At least four coal seams have been identified on surface and at past-producing operations, varying in thickness from 1.5 meters to 7 meters. They occur within the Chickaloon Formation, a Paleocene to Eocene-aged sedimentary sequence that includes all the coal measures in the Matanuska Valley. Conformably overlying the coal-bearing formation is the Eocene-aged Wishbone Formation, a primarily massive cobble conglomerate with minor sandstone unit. The youngest lithologic units found within the coal lease area are late Tertiary basaltic flows and hypabyssal intrusive rocks. The later igneous rocks have extensively intruded the older sedimentary rocks in various areas of the Matanuska Valley, with the intrusions becoming more extensive toward the eastern portion of the valley. All of the sedimentary and intrusive rocks have been subject to deformation, are rarely flat-lying and have been folded into series of anticlines and synclines. Coal seams are commonly structurally thickened within the hinges of these folds. The major result of the increased structural deformation of the stratigraphic units to the east within the Matanuska Valley is a progressive increase in coal rank to the east.
Coal was mined from six different operations in the Chickaloon area from 1905 to 1922, dominantly for U.S. Navy contracts, and again from 1958 to 1960. There has been no significant production, and minimal exploration from this high quality coal field since.
Full Metal’s coal lease bid covers 22,647 acres out of the 33,000 acres offered by the Alaska Mental Hearth Trust Land Office, at a rate of US$4.00 per acre or US$90,588. Full Metal will pay an annual rental of an additional US$4.00 per acre in each subsequent year, and be subject to performance standards under the lease. This rate will be adjusted every five years on the anniversary date of the lease by the Producer Price Index. The lease has 10 year term, which is subsequently renewable as long as commercial production is maintained. Upon commencement of commercial production, Full Metal shall pay the Alaska Mental Health Trust a production royalty of 5% of the gross value of coal sold, disposed of or consumed.
The Alaska Mental Heath Trust was established by the Alaska State Legislature as a land-grant trust to help fund State costs in relation to mental health care for Alaska residents. In pursuit of its goals of generating income from Trust lands, it held a competitive, sealed-bid-auction, coal lease sale on August 2, 2006 on metallurgical coal resource lands it owns near the historic mining town of Chickaloon, in south-central Alaska. All lease fees, bonuses, annual rentals, and royalties will go to the Mental Health Trust to support its operations.
Robert McLeod, P.Geo, Vice-President Exploration for Full Metal Minerals and Qualified Person as defined by NI 43-101, has prepared and approved the information contained in this release.
Full Metal has thirteen active mineral projects in Alaska. Plans for the 2006 field season in Alaska include a minimum of six diamond drill programs totaling $6 million in exploration. The Company has Joint Venture Agreements with Metallica Resources, Triex Minerals Corp., and Andover Ventures.
ON BEHALF OF THE BOARD OF DIRECTORS
Michael Williams, President and Director
The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this release.
Contacts: Full Metal Minerals Ltd. Jeff Sundar Manager, Investor Relations (604) 484-7855 (604) 484-7155 (FAX)
Source: Full Metal Minerals Ltd.