As a requirement of the TSX Venture Exchange, Royal Standard
Minerals Inc. ("RSM" or the "Company") (TSX VENTURE: RSM)(OTCBB:
RYSMF) retracts its August 26, 2008 press release in its entirety,
as it did not provide sufficient detail regarding the surface mine
coal project in Wolfe County, Kentucky, USA (the "Wolfe County
Project" or the "Project"). The Company is issuing this press
release to provide further clarification with respect to the Wolfe
County Project.
Clarification Regarding the Project
The viability of the Project for production is based on the
available data obtained from benching of the coal seams and
obtaining measurements at strategic locations within each drainage
basin, as well as on historical productivity in the region. The
basins are developed as dendritic drainage basins within the coal
fields; therefore the drainage patterns offer a number of primary
sampling outcrop points that allow for a distribution of sample
points. The ridge lines are analogous to the fingers on one's hand
with drainages within which the coal measures outcrop and are
amenable to sampling. In areas where the ridges are more than
one-half mile wide they are normally drill-tested to establish
continuity between the outcrop sample areas within the drainages.
In this manner the resource potentials and the coal quality are
confirmed within each drainage increment. With respect to the
Project, our current control has been established in this manner
and along with strategic drill holes has provided information on
thickness and coal quality. Details of drilling results as well as
trench and drainage sampling are set out below.
Once testing has been conducted in the manner described in the
foregoing paragraph, the decision as to the potential for a project
for future development is established, even before the permit
application process begins. If more data is required then
additional drilling is implemented to acquire this data. Coal has
been mined in the region of the Wolfe County Project for
generations; field sampling and analysis of outcrop and drill hole
sample analysis follow the historical values relative to btu and
ash levels, moisture content and sulfur levels for the coal seams
that exist within a given area.
No feasibility study or technical report, as those terms are
defined in National Instrument 43-101 - Standards of Disclosure for
Mineral Projects ("NI 43-101"), have yet been prepared in respect
of the Wolfe County Project, but a technical report is currently in
progress. The potential risk of going into production without
completing a feasibility study can be high; without such a study
there would be considerable potential to underestimate important
issues such as average coal quality, including ash, sulfur and BTU
levels, recovery costs and efficiency and market prices for the
coal, including mineability. This would constitute a major concern
because in the absence of a feasibility study there would be no way
to accurately measure the downside risk of the project. With
respect to the Wolfe County Project, the coal seams and the
formations that host the coal are well understood; sampling and
analysis of coal thickness and quality is generally easily
completed and is compared to generations of coal mining experience,
so risk regarding coal quality and thickness can be moderate.
At the outset of a project, a decision must be made as to the
potential that could exist within a permitted area. In the case of
a potential strip operation such as the Wolfe County Project some
additional risks include rock conditions that will affect mining
rates and cost (this material is in outcrop) as well as the haul
distance to the market and the type of mining equipment needed to
achieve the minimum mine production rate on the project. In the
case of the Wolfe County Project, the property has a net of six (6)
potentially mineable coal seams in the targeted section. The coal
seams are well exposed and sampled within the permit area and with
a thin-bedded, sandy-gray shale overburden, the Wolfe County
Project coal could possibly be mined with a minimum of blasting and
high-cost strip removal, which is an ideal mining condition that
may result in lower operating costs.
In general, the extent of a detailed analysis of a coal resource
must be done in conjunction with the State regulators in Kentucky,
USA, who evaluate the resource distribution, thickness and quality
during the permitting process. This process is well known; hundreds
of projects are conducted in this environment under these
conditions. At the Wolfe County Project, the drilling data within
the current bonded increment of 55.4 acres includes three drill
holes completed on the ridge line. The results of this work has
been confirmed by outcrop sampling. The drill sections indicated
the presence of six (6) potentially mineable coal seams within the
geologic section, with individual coal seam thickness averaging
approximately two (2) feet. The coal section from highest elevation
is the Fire Clay rider which is at a depth of 31 feet below the
ridge surface followed by a section of gray sandstone and sandy
shale to the Fire Clay coal seam that is located 29.33 feet below
the Fire Clay rider seam. The Whitesburg coal seam occurs 45.83
feet below the Fire Clay coal seam. The geologic section between
the Fire Clay and Whitesburg seams is a fine sandstone and a sandy
shale that includes a black shale sequence. The Cannel City coal
seam occurs 38.67 feet below Whitesburg seam, the geologic section
of gray shale and gray sandy shale. The Grassy coal seams occur
45.17 feet below the Cannel City coal seam. The geologic section
includes a sequence of gray shale and gray sandy shale. The Vires
coal seam occurs approximately 90 feet below the Grassy coal seam.
The geologic section consists of a gray shale, gray sandy shale and
gray sandstone. The chemical analysis of the various coal seams are
as follows:
DH-CH1 Fire Clay 18.49% ash 11,621 btu 1.63% sulfur
Whitesburg 19.70% 11,496 4.04%
Cannel City 4.04% 14,135 2.72%
Grassy 4.74% 14,137 2.12%
The distribution of drill holes is in an arc pattern at the head
of the hollow on the ridge tops. The drainage basin outcrop samples
of the individual coal seams within the hollow follow a regular
pattern of sampling within the basin. The density of sampling
points is subject to the results of the coal quality and thickness
distribution, i.e., if the coal quality and thickness results
indicate a normal pattern of distribution the level of sampling is
limited, indicating an acceptable correlation between sampling
points. The results of this drilling indicated the distribution of
coal seams and coal quality is generally in good agreement with the
drainage outcrop sampling data. The results of the bench and trench
samples for the lower-most coal seams are as follows:
BTR Whitesburg 6.55% ash 13,706 btu 1.45% sulfur
Grassy 4.20% 13,730 1.74%
Grassy 3.05% 13,795 1.12%
Grassy 4.79% 14,391 2.55%
Vires 8.97% 14,258 1.34%
The coal seams on the entire property (over 1,000 acres) have
not had the drilling necessary to state with confidence the amount
of coal in place for the project. However, the data acquired for
the current bonded increment, which is based on the mine plan for
the Project prepared by Alchemy Engineering LLC, was sufficient to
provide an acceptable development plan on the Project for State of
Kentucky regulators to approve the permit. Alchemy Engineering LLC
is an independent consulting engineering frim based in
Prestonsburg, Kentucky and was commissioned by RSM to prepare the
mine plan submission. The mine plan was prepared solely for the
State of Kentucky regulators for purposes of permit approval and
was not prepared in accordance with NI 43-101. Additionally, the
available geologic data, including the geologic maps completed by
the Kentucky Geological Survey for each 71/2 minute scale
(1":2,000') maps for all of the coal fields in the State of
Kentucky, provides a very good source of useful data to establish
the distribution of the various coal seams in place within a given
area. The geologic maps were completed by State geologists
utilizing field data, including actual measurements of coal seams
in the field within specific drainage basins. The measured sections
and the particular coal seams are identified on the maps. This data
is also supported by any known drill-hole data from oil and gas
drilling and prior coal exploration. Other useful data includes
measured coal sections from mining activities that either have
occurred or are occurring within the geologic quadrangle under
study. On balance this information can be useful for the
distribution of coal seam and thickness within a given area and
becomes much more useful for coal distribution as further details
from coal industry activities provide additional data to the
distribution of a coal seam within a given area. In summary, the
drill results and the mapping information coupled with the prior
mining activities provide very useful information in regard to the
potential of the Wolfe County Project.
The chemical analyses of the coal samples were completed by
Mineral Labs, Inc. of Salyersville, Kentucky
(www..minerallabs.com), which is one of the largest coal analytical
laboratories in the State of Kentucky and is State-certified.
Certificates of Analysis of outcrop coal indicate that the various
coal seams from lower to higher in the coal section include the
Vires, Grassy, Cannel City, Whitesburg, Fire Clay and the Fire Clay
Rider, for a cumulative thickness exceeding 10 feet of total coal.
The coal quality is generally a very high BTU level on a dry basis
as follows:
ASH CONTENT SULFUR BTU MAFBTU
2.12-6.97 0.73-2.55 13,624-14,500 14,184-15,115
All seams sampled, excluding the Fire Clay and Fire Clay Rider
(these seams were not yet sampled in outcrop), are within this
range of chemical analysis. Moisture results were high because of
the proximity to outcrop.
Current Status of the Project
The permitting and bonding for the initial phases of the Project
are in place. The Company purchased the permit-holder, Pick &
Shovel ("P&S") and the permit transfer is expected to be made
in the near future to Kentucky Standard Energy Company
Inc.("KSEC"), the current (100%) owner and operator of the permit
as indicated in the purchase agreement. The current bond for the
first increment of the Project is in the name of KSEC and P&S.
The next bond increment is expected to be in the name of KSEC. The
MSHA mine ID is in the name of KSEC, the severance tax number is in
the name of KSEC. All of the necessary surface equipment for a
mining operation is in place according to Roland M. Larsen, a
Qualified Person ("QP") under NI 43-101. It is emphasized here that
any current decision to proceed with mining at the Wolfe County
Project is not based on an acceptable feasibility study and the
project is still subject to the risks outlined above.
Field inspections occurred in October and early November, 2008
by coal field engineers employed by certain coal purchasers in
regard to the development of the Wolfe County Project. Potential
purchases of coal from the Project would be on a "spot" market
basis, with the possibility of going to longer term contracts in
the near future, although this cannot be assured. The Company
currently has a monthly "spot" market contract with Thoroughbred
Coal Company of Lexington, Kentucky. The price for November coal
production was set at US$93.50 per ton with coal quality
specifications of 6.5% ash, 12,500 btu and 1.5% sulfur. If the coal
shipped is below these specifications there will be deductions in
coal price and price increases for better than the minimum
specifications.
The potential quantity and grade of coal at the Project is
conceptual in nature. There has been insufficient exploration to
define a coal resource at the Project and it is uncertain if
further exploration will result in the Project being delineated as
a coal resource.
RSM is an exploration and development company with interests in
coal and precious metals in the United States.
The economic viability of this project is uncertain and is
contingent upon coal pricing and mining conditions that could
affect the project economics.
Ronald M. Larsen, a QP, has read and approved the information in
this press release.
The TSX Venture Exchange does not accept responsibility for
adequacy or accuracy of this release as per Exchange Policy 3.3
section 6.5.
Royal Standard Minerals Inc. cautions that the statements made
in this press release and other forward looking statements made on
behalf of the Company may be affected by such other factors
including, but not limited to, volatility of mineral prices,
product demand, market competition, imprecision of mineral
estimates, and other risks detailed herein and from time to time in
the Securities and Exchange Commission filings of the Company.
C.U.S.I.P. # 780919106
Contacts: Royal Standard Minerals Inc. Roland Larsen
804-580-8107 804-580-4132 (FAX) www.royalstandardminerals.com
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