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Friday, 18 January 13
NEWLEAD HOLDINGS LTD. TO ACQUIRE TWO COAL PROPERTIES WITH ESTIMATED COAL RESERVES OF 18.6 MMT & 143.1 MMT
 NewLead Holdings Ltd. Announces Signing Agreement to Acquire Properties with Estimated Coal Reserves of 18.6 Million Tons; Signing Agreement to Acquire Properties with Estimated Coal Reserves of 143.1 Million Tons and Securing 3-year Coal Supply Contracts Expected to Generate $873.5 million of Revenue
NewLead Holdings Ltd., is an international, vertically integrated shipping and commodity company that manages product tankers and dry bulk vessels, yesterday announced that the Company has entered into an agreement to acquire title and excavation rights in properties containing 18.6 million tons of estimated coal reserves for $11.0 million.
According to a press release posted on Company’s website, NewLead also entered into an agreement to acquire ownership and leasehold interests in properties containing approximately 143.1 million tons of coal for $55.0 million. Michael Zolotas, President and Chief Executive Officer of NewLead, stated, "We have expanded our recently launched commodities business with the agreement to acquire an estimated 18.6 million tons of coal reserves. We are in the process of acquiring additional coal properties with reserves estimated at approximately 143.1 million tons. Once we have acquired all of the assets, our coal reserves will consist primarily of sub bituminous B coal, which is 13,500 BTU with low sulfur. We will also have 'Blue Gem' and 'Rich Mountain' seams of coal, highly sought after in the international market. We believe that our international shipping expertise will allow us to exploit the demand for these coal reserves."
Michael Zolotas continued, "In entering the mining business, we undertook to secure supply contracts for the coal reserves. Consequently, we entered into two agreements to supply coal to third parties. These agreements are expected to generate $873.5 million of revenue over a three-year period. Based on our projections of operating costs, we believe that these sales will have healthy margins and will generate significant cash flow with which to fund continued growth. We intend to supplement the supply agreements by allowing contract miners to mine and pay us a royalty for coal removed."
Coal and Natural Gas Reserve Acquisitions
As of December 28, 2012, NewLead entered into an agreement to acquire title and mineral excavation rights to 5,000 acres of land in Kentucky. The coal reserves in these properties are estimated to be approximately 18.6 million tons. The transaction is subject to execution and delivery of certain definitive agreements and other closing conditions, but is currently expected to close by January 29, 2013. There can be no assurance that the transaction will be consummated. The consideration of $11.0 million was paid in the form of notes maturing on January 29, 2013. The notes do not accrue interest, but remain subject to a guaranty by the initial purchaser and are secured by a mortgage lien and a security interest in the assets being purchased.
NewLead has also entered into an agreement to acquire ownership and leasehold interests in 18,335 acres in Tennessee containing coal and natural gas and other natural resources. The agreement contemplates that the Company will acquire rights, title, permits and leases to coal mines with total reserves estimated at 143.1 million tons. The transaction is subject to execution and delivery of certain definitive agreements and other closing conditions, but is currently expected to close in February 2013. There can be no assurance that the transaction will be consummated. The agreement contemplates that consideration of $55.0 million shall be payable in cash in two installments; $30.0 million at closing and the remaining $25.0 million on the first anniversary of the closing.
The estimated reserves stated above are as determined by independent appraisals. The methodology used by the independent appraisers was not compliant with the methodology required by the Securities and Exchange Commission ("SEC") in reserve reports and, accordingly, should not be relied upon. Such reserve information is only provided to give the best currently available information. NewLead is undertaking to obtain reserve reports that comply with SEC methodology. Such reports may differ materially from the information provided herein.
The properties in Tennessee and Kentucky also include natural gas wells and projects relating to extraction of timber, sand, gravel, fly ash and dimension stone. Third parties are currently extracting these commodities on the properties and paying royalties.
Coal Supply Contracts
NewLead signed two coal supply contracts with creditworthy counterparties for the sale of coal to such parties. Annual revenue from these two contracts is expected to be $184.7 million in the first year, $318.4 million in the second year and $370.4 million for the third and final year.
The first contract provides for the sale of 70,000 tons of coal per month for the first 12 months (840,000 tons annually), increasing to 140,000 tons per month for the second year (1.68 million tons annually) and 210,000 tons per month for the third year (2.52 million tons annually). All tonnage is subject to a variation of 5%. The price was established based on the prevailing market price for coal at the time the contract was entered into.
The second contract provides for the sale of 130,000 metric tons per month for the first 12 months (1.56 million metric tons annually), increasing to 210,000 metric tons per month for the second and third years (2.52 million metric tons annually). All tonnage is subject to a variation of 5%. The price was established based on the prevailing market price for coal at the time the contract was entered into.
NewLead intends to source the coal to meet such contracts from the estimated reserves discussed above, but to the extent it is unable to do so, it will be required to seek to source the coal from other suppliers at the prevailing prices.
Management Company
NewLead also entered into an agreement to acquire a local coal mining management company in exchange for compensation, paid in the form $3.0 million in common shares of NewLead and a warrant for $6.4 million in common shares of NewLead. Such acquisition is subject to a number of terms and conditions and there is no assurance it will be consummated. The management company shall be responsible for managing the daily operations of the coal mines and the excavation of the coal from the properties.
For more details please visit www.newleadholdings.com.
Source: NewLead Holdings
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Wednesday, 11 March 20
CHINA TAIYUAN COAL TRANSACTION PRICE INDEX UP 0.07 PCT - XINHUA
China Taiyuan coal transaction price index stood at 133.16 points Monday, up 0.07 percent week on week.
The index, released by China ...
Wednesday, 11 March 20
SHIPPING MARKET INSIGHT - INTERMODAL
On the 4th of September the Baltic Dry Index marked its highest level for 2019, reaching 2,518 points, while the rest of the dry indices also recor ...
Tuesday, 10 March 20
SHIPPING MARKET ANALYSIS
It might be already overstated, but it seems to be important to point out once again how peculiar the current circumstances are.
Before the st ...
Tuesday, 10 March 20
EIA FORECASTS U.S ELECTRIC POWER SECTOR DEMAND FOR COAL WILL FALL BY 81 MMST (15%) IN 2020
EIA forecasts that U.S. coal production will total 595 million short tons (MMst) in 2020, down 95 MMst (14%) from 2019. According to EIA's Shor ...
Tuesday, 10 March 20
CORONAVIRUS: DEMAND DOWNGRADES FOR BULK COMMODITIES - WOOD MACKENZIE
The coronavirus outbreak is a rapidly evolving news story – and a real wildcard for bulks demand. Our global experts are monitoring the impac ...
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- VISA Power Limited - India
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- South Luzon Thermal Energy Corporation
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- Cement Manufacturers Association - India
- Directorate Of Revenue Intelligence - India
- Singapore Mercantile Exchange
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Sical Logistics Limited - India
- Sakthi Sugars Limited - India
- Aboitiz Power Corporation - Philippines
- Chamber of Mines of South Africa
- Pipit Mutiara Jaya. PT, Indonesia
- Antam Resourcindo - Indonesia
- Deloitte Consulting - India
- IEA Clean Coal Centre - UK
- Bhushan Steel Limited - India
- Gujarat Electricity Regulatory Commission - India
- Energy Link Ltd, New Zealand
- Banpu Public Company Limited - Thailand
- Kepco SPC Power Corporation, Philippines
- Georgia Ports Authority, United States
- TNB Fuel Sdn Bhd - Malaysia
- Thai Mozambique Logistica
- White Energy Company Limited
- Gujarat Sidhee Cement - India
- International Coal Ventures Pvt Ltd - India
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- The Treasury - Australian Government
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- Semirara Mining and Power Corporation, Philippines
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- Therma Luzon, Inc, Philippines
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- London Commodity Brokers - England
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- Trasteel International SA, Italy
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- Timah Investasi Mineral - Indoneisa
- Sarangani Energy Corporation, Philippines
- Maharashtra Electricity Regulatory Commission - India
- Baramulti Group, Indonesia
- Minerals Council of Australia
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- Global Business Power Corporation, Philippines
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- Edison Trading Spa - Italy
- Australian Commodity Traders Exchange
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- GN Power Mariveles Coal Plant, Philippines
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- PTC India Limited - India
- Wood Mackenzie - Singapore
- Medco Energi Mining Internasional
- Orica Mining Services - Indonesia
- Savvy Resources Ltd - HongKong
- Goldman Sachs - Singapore
- Chettinad Cement Corporation Ltd - India
- Barasentosa Lestari - Indonesia
- Ministry of Mines - Canada
- Kartika Selabumi Mining - Indonesia
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- Coastal Gujarat Power Limited - India
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- CNBM International Corporation - China
- Bharathi Cement Corporation - India
- Semirara Mining Corp, Philippines
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- PowerSource Philippines DevCo
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- Kumho Petrochemical, South Korea
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- Parry Sugars Refinery, India
- Salva Resources Pvt Ltd - India
- Jindal Steel & Power Ltd - India
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- Rashtriya Ispat Nigam Limited - India
- Electricity Generating Authority of Thailand
- Cigading International Bulk Terminal - Indonesia
- GVK Power & Infra Limited - India
- Central Electricity Authority - India
- Kohat Cement Company Ltd. - Pakistan
- Posco Energy - South Korea
- Anglo American - United Kingdom
- Heidelberg Cement - Germany
- Siam City Cement PLC, Thailand
- Petrochimia International Co. Ltd.- Taiwan
- Meenaskhi Energy Private Limited - India
- Economic Council, Georgia
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- Carbofer General Trading SA - India
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- Ministry of Transport, Egypt
- Alfred C Toepfer International GmbH - Germany
- GAC Shipping (India) Pvt Ltd
- SMG Consultants - Indonesia
- Vedanta Resources Plc - India
- Mintek Dendrill Indonesia
- SN Aboitiz Power Inc, Philippines
- Coal and Oil Company - UAE
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- Kapuas Tunggal Persada - Indonesia
- Africa Commodities Group - South Africa
- Bhatia International Limited - India
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- Indogreen Group - Indonesia
- Maheswari Brothers Coal Limited - India
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- Merrill Lynch Commodities Europe
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- Interocean Group of Companies - India
- PetroVietnam Power Coal Import and Supply Company
- Bukit Baiduri Energy - Indonesia
- Indian Oil Corporation Limited
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Sojitz Corporation - Japan
- Kideco Jaya Agung - Indonesia
- Global Coal Blending Company Limited - Australia
- Directorate General of MIneral and Coal - Indonesia
- Price Waterhouse Coopers - Russia
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- The University of Queensland
- Simpson Spence & Young - Indonesia
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- New Zealand Coal & Carbon
- Australian Coal Association
- Bayan Resources Tbk. - Indonesia
- Petron Corporation, Philippines
- Standard Chartered Bank - UAE
- Rio Tinto Coal - Australia
- Port Waratah Coal Services - Australia
- Krishnapatnam Port Company Ltd. - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Indian Energy Exchange, India
- Bhoruka Overseas - Indonesia
- Miang Besar Coal Terminal - Indonesia
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- Asia Pacific Energy Resources Ventures Inc, Philippines
- India Bulls Power Limited - India
- Attock Cement Pakistan Limited
- IHS Mccloskey Coal Group - USA
- Ministry of Finance - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Mercuria Energy - Indonesia
- Bangladesh Power Developement Board
- Formosa Plastics Group - Taiwan
- Indika Energy - Indonesia
- Ind-Barath Power Infra Limited - India
- McConnell Dowell - Australia
- LBH Netherlands Bv - Netherlands
- Kaltim Prima Coal - Indonesia
- Parliament of New Zealand
- Indonesian Coal Mining Association
- Riau Bara Harum - Indonesia
- Kobexindo Tractors - Indoneisa
- Renaissance Capital - South Africa
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- Videocon Industries ltd - India
- Orica Australia Pty. Ltd.
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- Energy Development Corp, Philippines
- Metalloyd Limited - United Kingdom
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- Romanian Commodities Exchange
- Straits Asia Resources Limited - Singapore
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