Colonial Coal International Corp. (TSXV:CAD) soared this week after the British Columbia-based coal developer released news that it has struck a deal to acquire up to 90 per cent of the interests in the Bullmoose Property in the Elk Valley. The news drove the price of Colonial Coal shares up by over 40 per cent this week alone.
Colonial Coal is an up and coming coal developer in the Elk Valley, one of the world’s most attractive coal mining regions. The company’s acquisition of interests in the Bullmoose Property will give it access to some of the most promising coal assets in the valley.
The Bullmoose Property is estimated to have in excess of 120 million tonnes of coal resources. Colonial Coal plans to use the property to combine its existing mine-permitting capabilities and its expertise in coal-bed methane development to create an integrated coal production operation for Asian markets.
The increasing demand for thermal coal in Asian markets, most notably in China and India, has driven up the value of the Bullmoose property. Chinese demand for thermal coal in particular is expected to remain strong in the coming months, and the purchase of interests in the Bullmoose Property puts Colonial Coal in the ideal position to capitalize on the growing demand.
Colonial Coal’s share price surged this week in light of the company’s news, making it one of the five top weekly stocks on the TSXV. The company’s stock closed up 41.25 per cent on the week on the news, cementing its position as one of the most profitable trades for this week.
Colonial Coal’s ability to seize the opportunity of gaining interests in the Bullmoose Property has paid off handsomely for its shareholders. With this week’s performance, Colonial Coal has positioned itself to capitalize on the rising demand for thermal coal from Asian markets, and the stock could potentially continue to soar in the coming months.