Silverado Green Fuel, Inc., a wholly-owned subsidiary of Silverado Gold Mines Ltd., is planning a $25 million fuel production facility at the Red Hills EcoPlex in Ackerton, Miss.

The project’s cost includes an initial investment of $13.1 million in machinery and equipment.

The plant will be used to convert lignite, a low-rank coal, into a liquid fuel that can be used in industrial boilers.

The process used to convert the lignite is called hypothermal treatment.

The process is being developed so that the U.S. can become less dependent on foreign sources of crude oil, according to a company release.

The preliminary cost of the new fuel is estimated to be $15 a barrel.

Silverado Green Fuel anticipates that further refinement of the fuel will add more value and make the end product even more environmentally benign.

Pickering Inc. and Great Northern Engineering will design the plant with Silverado Green Fuel.

Crowder Engineering will clear and grate the 14-acre site. The project should come online in 2009.

If successful, Silverado Green Fuel has stated it could build a larger commercial facility in the next four years, which could employ hundreds in the North Mississippi region.