SANTIAGO, Chile, May 20, 2009 (GLOBE NEWSWIRE) -- Southern Energy Company, Inc. (Pink Sheets:SOCI), a publicly traded resource exploration company, is pleased to announce that it has officially closed today on its acquisition of the two Lota Bay Coal Concessions. This closing is ahead of its planned scheduled closing of both coal concessions. The closing of the acquisition will allow the Company to complete the previously announced geophysical and environmental program and to begin preparing the site for production.
About the Lota Bay Coal Concessions
The First Lota Bay Coal Concession is located in the harbor of Lota Bay, Chile. In March 2006 a drilling test was performed in this area. The net results of these tests show 275,000 proven tons of recoverable bituminous thermal coal in the harbor with probable reserves of 90,000 tons. The coal within the boundaries of the concession is a layer averaging 2.26 meters in thickness in 10 meters of water with 1.7 meters of overburden. The rights to remove the Lota coal were granted through a Minor Maritime Concession On A Section Of The Sea Floor from the Chilean Government on August 20, 2008.
The Second Concession is adjacent to the First Lota Bay Coal Concession and has also been drilled with indicated reserves in excess of 200,000 tons of recoverable coal.
The combined total of the two concessions provides a known reserve in excess of 500,000 tons of recoverable coal. Upon completion of this acquisition, the Company plans to engage in further drilling, to be carried out over the course of the next several months, with a planned start to production to coincide with the South American spring season.
Lota was a major coal-mining centre in southern Chile, situated on the Golfo (gulf) de Arauco. Although the city of Lota was founded in 1662, sustained development of coal mining did not begin until 1852, when the industrialist Matias Cousino started a coal-mining enterprise. Completion of a railway from Concepcion, 32 km north, in 1888 stimulated growth. In the 1990's Lota's coal resources became exhausted and cheaper Colombian coal began to compete in the market causing the coal mines to close after 145 years of continuous operations.
Over the 145 year span of Lota coal mine operation, many tons of coal was dumped or spilled into the harbor. Most of the spilled coal resulted from primitive shipping and conveying practices that were in use over the last 145 years.
The operational plan is to dredge up the coal and process it in an adjacent industrial site. Lota has grid power, water, sewage, road and rail access. The coal will be marketed to nearby coal burning thermal electric generating plants which currently have to import to meet the growing electrical demands.
The projected economics is based on the current price for coal in Chile of $60 per ton. This price reflects the demand for coal in Chile as 84% of Chile's electrical production is from coal fired generation plants.
About Southern Energy Company, Inc.
Southern Energy Company, Inc. is a publicly traded resource exploration company. From 2007 to the present the company has been active in seeking out resource opportunities in North and South America to explore, develop, and produce. The Company is currently focused on the acquisition, exploration and development of coal, gold and silver properties throughout South America. Currently, Southern Energy owns the Catalina Silver and Gold Property northwest of Santiago, Chile, and the two Lota Bay Coal Concessions in Lota, Chile.
Please visit http://www.southernenergycompany.com for more information.
Forward-Looking Statements
You should not place undue reliance on forward-looking statements in this press release. This press release contains forward-looking statements that involve risks and uncertainties. Words such as "will," "anticipates," "believes," "plans," "goal," "expects," "future," "intends," and similar expressions are used to identify these forward-looking statements. Actual results could differ materially from those anticipated in these forward-looking statements for many reasons, including the risks we face as described in this press release. For further information about Southern Energy Company, Inc. please refer to its Web site at http://www.southernenergycompany.com.