We have a very good Trading Idea for you to look at for Monday morning.

This trading idea is a dynamic energy company based in Denver, Colorado. We are expecting to see some easy gains with this Trading Idea, but itís long-term growth model is also very tantalizing.

American Power Corporation is an energy company focused on the development of coal resources to support the generation of electricity.

AMPW's Pace Coal Project in Judith Basic County, Montana covers 29,000 acres and has the potential to produce anywhere from 172 million to 410 million tons of coal. These estimates are based on a 30-hole drilling program conducted by Mobil Oil Co. (now ExxonMobil).

Taking this range, and current coal prices into consideration, AMPW could be sitting on anywhere from $11 billion to more than $25 billion in coal resources.

What's even more interesting about AMPW's potential haul is that Deutshe Bank AG very recently raised price forecasts for coal by as much as 17% on expectations that a shortage of the fuel source will drive prices higher. In fact, power coal prices are expected to average $118 per ton in the next year, and climb as high as $140 per ton in 2012.

Considering more than 50% of electricity in the United States is produced from coal resources, it may come as no surprise that coal prices are poised for a substantial increase. This is a large reason that AMPW is focusing on the acquisition of near-term, large scale coal projects located in close proximity to national transportation links, which stands to reduce development and ongoing operation costs by millions.

While many junior mining companies have expectations, AMPW has already kick-started a plan to move to exploration and development by mid-2011. In fact, AMPW has retained Weir International, Inc. to prepare an exploration drilling program and to supervise its execution in order to evaluate the coal reserve potential of the Pace coal property. Better yet, AMPW has already started the permitting process for drilling, and intends to initiate drilling operations during the first quarter of 2011.

Not only does AMPW have a plan, but they also closed a $10 million financing agreement to make it a reality. These funds will be used for AMPW's ongoing exploration, development and acquisition strategy. What's even better is that this agreement could lead to an additional $10 million in financing in the future.

More recently, AMPW issued an update on on its high potential Pace Coal Project that reported the Company retained Mission Engineering, Inc. to prepare and submit a coal prospecting permit application to the Montana Department of Environmental Quality. After performing the planned drilling program, which will consist of 61 locations on the property, AMPW plans to place a significant portion of its coal holdings in the proven and probably reserve classification, "with an ultimate goal of establishing sufficient resources to support a greater than 20 year operational mine life."

With a potential of 410 million tons of coal resources, and production capacity of 11 million tons per year, AMPW could generate an estimated $495 million a year for approximately 37 years.

On Friday, AMPW gained about 3.5%, closing at $0.93 per share. This puts AMPW shares down 7% from their recent high of $1.00, and 25% off from their 52-week high of $1.25.

View the Company's website HERE.

Read an investor report on the Company HERE.

 

This communication contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All forward-looking statements are inherently uncertain as they are based on current expectations and assumptions concerning future events or future performance of the company. Readers are cautioned not to place undue reliance on these forward-looking statements, which are only predictions and speak only as of the date hereof. In evaluating such statements, prospective investors should review carefully various risks and uncertainties identified in this release and matters set in the company's public filings. These risks and uncertainties could cause the company's actual results to differ materially from those indicated in the forward-looking statements.

 

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