Projects

In order to execute on the Company’s Corporate Vision, Corsa’s strategy is as follows:

• Acquire producing coal assets with high quality reserve base
• Employ superior management practices and prudently infuse capital to upgrade operations
• Achieve organic growth by “ramping up” production and quickly developing reserves

Corsa has a team with significant experience in developing and mining coal deposits in the Appalachian coal fields region and they are currently conducting due diligence, evaluation work and discussions on several development projects, mining operations and corporate opportunities in the coal sector.  

Miller-Walker Property Coal Lease

On December 21, 2009, Corsa announced the signing of an option agreement with Sherpa Mining Contractors, Inc. (“Sherpa”) on the “Miller-Walker Property” Coal Lease in Somerset County, Pennsylvania, USA. The transaction was conducted through Corsa Coal Pennsylvania, Inc. (“Corsa Coal”), a 100% owned subsidiary of Corsa Capital Ltd.

The option with Sherpa is for Corsa Coal to acquire certain mining rights to the 105 acre Miller-Walker Property (“Property”) in Somerset County, Pennsylvania, USA. The Property is a metallurgical coal lease, of which the scope and size of the reserve base is yet to be determined. The Board of Directors considers the acquisition of the option on the Miller-Walker Property a first step in the execution of its metallurgical coal strategy. 

Summarized Deal Terms

The option terms on the Miller-Walker Property are as follows:

• Corsa Coal will make an initial cash payment to Sherpa of USD$25,000 (“Option Payment”) for the exclusive option to acquire the property and the right to fund the exploration of the Property and also fund completion of the permitting required in any mine site development process;
   
• Corsa Coal has the right and option to acquire a 100% interest in the Property, with no further expenditure commitments, by making a one-time cash payment to Sherpa in the amount of USD$1,500,000 before December 31, 2011. Corsa Coal's exclusive option may be executed in writing at any time prior to December 31, 2011, and is subject to the terms and conditions of the instruments granting Sherpa its interests in the Property;
   
• Corsa Coal is required to incur exploration expenditures, (including costs associated with engineering studies, permitting or securing coal leases) in Year 1 before December 31, 2010, with a minimum commitment of USD$50,000. Exploration expenditures in Year 2 are at the option of Corsa Coal and must be before December 31, 2011;
   
• If Corsa Coal terminates or does not exercise its option to acquire a 100% interest in the Property within the allotted 2 year time period, the option will lapse. Sherpa will repay all expenditures made by Corsa Coal on the Property, including the Option Payment, from proceeds from future mining income from the Property. Repayments to Corsa Coal by Sherpa will be made at the rate of $2 per ton of raw coal extracted, with minimum payments of $15,000 per annum until the expenditures are repaid.

The transaction is subject to the acceptance of the TSX-Venture Exchange.