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The coal boom is as strong as ever.

The Economist says, "Demand for [coal] has never been stronger."

The Institute for Energy Research says, "For China, coal is still king."

The Wall Street Journal reports, "[Chinese] officials worry miners are running down reserves too quickly to meet the needs of a rapidly expanding economy."

Governments of the fastest growing economies in the world are making efforts to grow electricity production from all sources. Theyve invested hundreds of billions of dollars building oil, natural gas, nuclear, wind, and solar power plants to keep up with demand.

But its just not enough. Theyre forced to turn to thermal coal to burn meet the rising electricity demand at an affordable price.

On top of that, steel demand continues to rise and demand for high-grade metallurgical coal essential for steel production is rising right along beside it.

The electronics industry is also booming and the silicon industry needs silicon-grade coal to meet the demand for all the chips to run the ever-growing number of in-demand electronics.

Everything is coming together to create a situation where coal demand is outstripping supply. Coal miners can barely keep pace with surging demand.

The coal boom is here and coal miners, from small to large, are rapidly increasing production.

Thelon Capital (TSX-V:THC), through two recent acquisitions, has set its sights on rapidly expanding its coal production and capitalizing on the ongoing coal boom.

Thelon has made many significant strides in the past few months that have put it on its way from a $12 million junior coal development company to a mid-tier coal production company very quickly and is still valued at a fraction to its peers.

One Major Coal Acquisition Complete, One to Go

Thelon has been laying the foundation for rapid growth in the last few months.

The company has announced two big acquisitions of coal-producing projects, successfully raised additional capital, and added key management personnel with decades of coal industry experience.

Thelons two acquisitions will immediately add significant revenues and reserves for a company valued at $12 million.

The first major acquisition came in December, 2010. Thelon announced it acquired 100% ownership of the Clear Fork Mining Company which owns the Jellico Coal Project in the heart of a high-grade coal district in Tennessee.

The Jellico Project consists of 6400 acres of fee simple land (that means Thelon owns all the resource rights including coal, timber, oil, gas, etc.) including Tennessees prolific Blue Gem Seam.

An independent analysis of the project by A. R Leamon in July 2009 (non 43-101 compliant) estimated the Jellico project contains 13 million tons of high quality coals.

The Jellico project is big, but it also has many advantages that will start adding value to Thelon right away.

For example, the coal in the Jellico Project is exceptionally valuable. The mix of coal types includes thermal, metallurgical, and silicon-grade coal which is used to produce silicon metals. Thats critical because of the market values of the types of coals. Thermal coal sells for between $85 and $95 per ton. Metallurgical coal can sell for as high as $150 per ton. Silicon-grade coal can earn as much as $250 per ton on the open market.

Also, the Jellico Project has significant exploration potential and reserves increase production. Currently only 720 acres of the entire 6400 acre project are permitted for production. The other 5,680 acres have yet to be significantly developed.

The potential production on the Jellico Project just adds to its value. Thelon expects to ramp Jellicos production up to between 35,000 and 45,000 tons per month of coal within the next year. That kind of production will increase Thelons annual royalty revenue from about $1.8million to between $3 and $5 million per year.

Jellico also has another significant advantage. Due to the geological structure of its deposit, it actually gets a more valuable mix of coal as it develops. The mix of coal produced becomes steadily more weighted to the more valuable metallurgical and silicon metals types of coal.

The Jellico Project is a "company making" type of coal project that adds significant value to Thelon. The project is big, has exceptionally valuable coal, has a large area permitted and is already in production.

Thelon didnt stop with just one high-potential project though. The company recently announced another acquisition that will add more coal reserves, cash flow, and management experience to the rapidly growing company.

A Steal of a Deal

In February 2011, Thelon announced it intends to acquire a 100% interest in a private coal mining company in Tennessee.

The private coal mining company currently produces 50,000 tons of coal per year, generates $60 million per year in gross revenue, and employs more than 100 people.

The private coal company is currently operating the four projects which has an estimated 22 million tons of recoverable coal. The projects reserves include 4.5 million tons of the Blue Gem Seam metallurgical coal which is much more valuable than thermal coal.

Thelon intends to increase production though from 50,000 tons to 80,000 to 100,000 tons within a year of completion of the acquisition.

The private company also brings with it $24 million in equipment and production facilities which are already in place and operational.

Thelon will acquire all of these assets for a total purchase price of $42 million. The total purchase price includes $7 million of surety bonds.

Thelon has announced a $4.5 million raise and has already made a $1 million down payment they have up to 180 days from March 25, 2011 to complete the deal.

The private company acquisition adds significant production capability, more than doubles estimated coal reserves, and adds millions more in revenues right from the start. But perhaps the most compelling part of the rapidly unfolding Thelon story becomes strikingly apparent when Thelon is compared to other junior coal development companies.

A Fraction of the Price

When it comes to coal, there are no apples-to-apples comparisons. Every deposit is unique. Each one has different grades, processing costs, mixtures of different types of coal, etc. However, by the most basic comparative measures of coal companies, Thelon is exceptionally undervalued.

When valued relative to its current market capitalization of $12 million and its total estimated coal reserves, Thelon is currently valued at a fraction of other coal companies:

When valued relative to its current market cap to monthly coal production, Thelon is once again currently valued at a fraction of other coal companies

Share Structure:

Common Shares Outstanding: 32.59 million

Fully Diluted Shares Outstanding: 48.19

Market Value (@ 40 cents per share): $12 million

Management

Thelon expects to rapidly growing its coal production, expand its reserves, and finish some major moves, but its also adding essential experienced management too.

For example, in March 2011 Thelon announced William A. Cousins will be joining the board of Directors and will be the COO as well as managing direction of the Clear Fork Mining Company (owner of Jellico Project) which is now a wholly-owned subsidiary of Thelon. Cousins will hold a 17% stake in Thelon.

But Cousins is just one of the essential leaders driving Thelons rapid growth. The others include:

Jason M Walsh - President, Director - has 20 years of relevant business experience. He started his entrepreneurial career at the early age of 16, in the general contracting business. Seven years later, he started a 10 year career as a stockbroker, which allowed him to gather invaluable experience in the formation and financing of venture capital companies similar to Thelon Capital. Subsequently, he joined Thelon Capital as president in 2003, where his previous business experience has allowed him to be instrumental in the building of the companys substantial resource property portfolio, financing of the companys projects and overseeing the companys day-to-day operations

Glen McDonald - Director, Secretary - joined the Board of Directors in 2002. He is a professional geologist, with over 30 years of exploration & mine development experience in the mineral industry. He has designed & managed exploration campaigns worldwide for both metals & gemstones, & has concentrated primarily on Canadian diamond & gemstone exploration for the past 10 years. He has served on the Boards of numerous public companies with management roles in technical, project management & financing. Mr. Macdonald will assume technical responsibility for development of the Companys gemstone exploration programs.

John Roozendaal, B.Sc. geology - Director - has a B.Sc. in Geology and 19 years experience in the mining industry. John is founder and President of VMS Ventures Inc (VMS.V) and Harvest Gold Corp (HVG.V) ventures focused on the development of base and precious metals projects in Canada and the USA. Mr. Roozendaal has experience with various aspects of corporate governance through his involvement with private, public and governmental boards of directors.

Geoff Watson - Director - For the past 30 years, Geoff Watson has been involved in various aspects of the securities industry. He has been involved with institutional client management, and hasassisted in the financing of manypublic companies. Mr. Watson has also been involved in the corporate communication and development of numerous North Americanpublic companies.

William A. Cousins-Director, COO- is Managing Director of Clear Fork Mining, brings the company over 30 years proven management experience, and local knowledge in all stages of mine planning, permitting, leasing, and day-to-day mine operations in the Appalachian coal industry.

Tim Webb - Advisory Board - has served as Management and as Owner/Operator of several producing coal companies over the past 20 years. He brings tremendous insight into Mine management and the Coal industry in the Appalachians.

Mark Reynolds- Advisory Board - has 25 years of experience in mining and transport operating logistics; instrumental role in the founding of Western Canadian Coal Corporation. Most recently Mr. Reynolds was COO of MCoal corp. and was instrumental in putting the Rose mine in Alabama into production

W.E. Brereton, M. SC. (A), P.Eng.- Advisory Board - brings over 30 years experience in the mining business world-wide, He has initiated and/or managed a wide variety of mineral projects ranging from regional reconnaissance to detailed drill evaluation of potential ore bodies.

The Bottom Line

Thelon Capital (TSX-V:THC) has aggressively positioned itself to become a significant coal producer in short order.

The combination of large reserves, rapid production growth, experienced management and high quality coal all located in the coal-friendly state of Tennessee has put Thelon on an aggressive growth trajectory.

The global coal industry fundamentals are on Thelons side too. The financial media has documented the rising global demand for coal coming in the next few years and the inability of coal producers to ramp up capacity fast enough to keep up with demand.

Thelon has demonstrated its ability to grow through acquisition and organic production growth potential has it well-positioned to capitalize on the supply/demand imbalance facing the coal industry.

Finally, Thelon is significantly undervalued relative to its peers. Whether compared by its current market cap relative to reserves or production, Thelon is trading at a small fraction to other comparable coal companies.

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