“For us it was a huge find,” said Bruce Meece, TECO Coal vice president of administrative and strategic planning. “We’re working toward the goal of developing the reserve at this time.”

The regulatory approval process already has begun by the subsidiary of Florida-based TECO Energy, and Meece said the company is “optimistic about the expeditious approval” of amended and/or new mine permits. Mining the new reserve is probably a couple of years away and, when it begins, TECO expects to extract about 1.5 million to 2 million tons annually.

Premier Elkhorn is headquartered near Myra in Pike County. The company operates several underground and surface mines in Pike and Letcher counties, currently producing PCI coals, specialty stoker products and steam coal.

Meece said the reserve resulted from the company’s exploratory drilling program. “We have historically had an unwritten policy that we look below drainage for any seams that may be present,” he said. “We’re looking for something under someone else’s nose…we own a lot of property in the area.”

During the search, “one hole showed a little potential, and a little later on we had another with potential,” he said. Then, “We built some data in there and it showed potential for a block of coal down there. It’s a very dynamic seam down there.”

TECO decided to step up drilling. “We worked through it last year and we went at it very hard this year,” he said. “The real acceleration came early in 2011. That’s when we looked at the pieces and presented it to our senior management.”

TECO first reported the discovery in an early November filing with the U.S. Securities and Exchange Commission.