VHGI Holdings, Inc. | VHGI

We want to add VHGI to our extended-term watchlist. The stock has recently been breaking new highs, and we feel that despite its sizable gains over past months, there is a chance that this stock could enter blue-sky breakout mode at any time.

Should the company make good on its plan to put its coal mine into full production, then 2012 could be VHGI’s year. More on that in today’s press release:

FT. WORTH, Texas, Dec. 9, 2011 /PRNewswire via COMTEX/ — VHGI Holdings, Inc. (OTC.QB: VHGI) is pleased to announce that its wholly-owned operating company, VGHI Coal, Inc., has extended its binding letter of intent until January 30, 2012, to purchase, an Indiana-based company whose sole operations consists of operating a coal mine in Indiana. VHGI and Rick Risinger, the sole shareholder of the mining company, are in the process of finalizing the definitive transaction documents and obtaining the various bank, third-party and regulatory consents necessary to consummate the transaction. The parties intend to close this transaction as soon as possible following receipt of such consents. VHGI Coal has already invested approximately $4.5 million in the Company in order to build-out the infrastructure and put the mine into full production by January, 2012.

The company has the rights to mine a total of 2,800 acres, with verified reserves of 21 million saleable tons of coal available, with the ability to expand to an additional 80 million recoverable tons. The mine has received all necessary regulatory approvals, and is currently in production. The mine is currently shipping and producing approximately 130,000 tons of coal since August 2011, and is expanding production starting in January.