Mina Luz (Coal)

AM Resources owns 80% of the Mina Luz property, a growing coal-producing project

The property consists of mining concession No DJU-071 covering 40 hectares. The mining title is valid for a period of 22 years from the date of registration (2002). The property lies southwest of the town of Popayan in the department of Cauca, approximately 150 km to south-southwest of the town of Cali, in the southwestern part of Colombia, municipality of Patia.

In November 2016, AM applied for a 3,595-hectare extension of the property. The extension has been granted although the authorities have not yet completed the administrative process. The extension, wholly owned by AM, is considered part of the property.

Geology and previous work

Government geologists carried out a full geological reconnaissance program on the Cauca coal belt (a stretch of some 80 km of the Tertiary-age Mosquera sedimentary formation that hosts the resource), including channel sampling of outcrops, trenching, exploration pits and diamond drilling of six HQ and NQ holes. International standards in place at the time were then applied to assess the coal potential of the entire belt.

In the area, three different productive levels of the Mosquera middle Formation contain a total of 25 plies (called mantos) ranging in thickness between 0.60 m and 2.68 m. Nine mantos are 1.0 m thick or more. Faulting and folding are quite intense, and the resource is found in a complex structural setting. Holes PC-3, 4 and 6 were drilled in the vicinity of or on the property.

The quality of the coal in the area ranges from Bituminous High Volatile C and B to Subbituminous B (medium quality). This type of coal is maintly used to generate electricity in Colombia.

The potential for small-scale underground or surface mining for medium quality, structurally complex coal is well established in the area. Due to the complexity of the ore, however, a fair amount of delineating work is necessary to properly define the folded and faulted coal mantos.

Since the beginning of the fall of 2016, AM has carried out various surveys in the area, including geological reconnaissance, surveying and trenching. AM has also purchased some of the equipment required to initiate mining on the property and support the local miners who sell their coal to AM.

Mina Luz property