White Energy’s coal mining operations in Kentucky, USA are held...

White Energy’s coal mining operations in Kentucky, USA are held through 51%-owned subsidiary Mountainside.

MCC received a royalty of $0.4 million on the coal produced from the permits it sold during the prior year and it's expected that will continue in the 2019 financial year.

MCC’s personnel have been preparing future mine plans that target higher-yielding areas. MCC currently has additional permits in various stages of approval and many acres containing low-ash Blue Gem coal resources in Kentucky that are in the initial permitting phase. MCC continues to advance the permitting process and additional leases are being sought as mine plans for new areas are progressed.

The reclamation activities undertaken during the year focused on open pits being backfilled, graded and hydroseeded. The reclamation activities resulted in the release of $0.9 million of cash held as security. Reclamation activity continues, with applications being made for bond releases as rehabilitation work in each area is completed.

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It appears that the delay in selling further Mountainside assets has been further exploration combined with selling an area and obtaining future royalties on sales. This is a slow process but probably the right way to go in the longer term.