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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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Monday, 24 February 20
CHINA SAYS MAJOR COAL FIRMS RESTORE 95% OF PRODUCTION CAPACITY - REUTERS
China’s coal companies controlled by the central government have resumed operations and are back at more than 95% of their capacity, an offic ...
Sunday, 23 February 20
SHIPPING INDUSTRY FACES $370 MILLION HIT FROM NEW PANAMA CANAL CHARGE - REUTERS
A new “freshwater” charge that came in this month to help the Panama Canal cope with climate change will cost the shipping industry up ...
Sunday, 23 February 20
A 57,000DWT SHIP FIXING DELIVERY SOUTH KALIMANTAN TRIP, REDELIVERY CJK, AT $7,600 - BALTIC BRIEFING
Capesize
The Capesize market found little to cheer about this week as it again endured remarkable lows. The Atlantic continued to improve, with ...
Saturday, 22 February 20
THE SURPRISING MOVE IN MARINE FUEL SPREADS - ING
Middle distillates tank
One of the biggest surprises since the implementation of new International Maritime Organization (IMO) sulphur regulati ...
Friday, 21 February 20
CAPE: AVERAGE NOMINAL DAILY EARNINGS STILL ADMITTEDLY UNCHANGED W-O-W AT BELOW US$3000 - FEARNLEYS
CAPE
The worst may just about be over for the big ships. Average nominal daily earnings still admittedly unchanged w-o-w at below US$3k, but sent ...
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- Kaltim Prima Coal - Indonesia
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- London Commodity Brokers - England
- Attock Cement Pakistan Limited
- Wilmar Investment Holdings
- Directorate General of MIneral and Coal - Indonesia
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- Edison Trading Spa - Italy
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- Thiess Contractors Indonesia
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- Metalloyd Limited - United Kingdom
- Indonesian Coal Mining Association
- Bangladesh Power Developement Board
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- PowerSource Philippines DevCo
- Wood Mackenzie - Singapore
- Semirara Mining and Power Corporation, Philippines
- Rashtriya Ispat Nigam Limited - India
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- SMC Global Power, Philippines
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- Chamber of Mines of South Africa
- Mintek Dendrill Indonesia
- CIMB Investment Bank - Malaysia
- Eastern Energy - Thailand
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- TNB Fuel Sdn Bhd - Malaysia
- Agrawal Coal Company - India
- Ministry of Finance - Indonesia
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- Electricity Authority, New Zealand
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- Bhatia International Limited - India
- Toyota Tsusho Corporation, Japan
- Thai Mozambique Logistica
- Kobexindo Tractors - Indoneisa
- IEA Clean Coal Centre - UK
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- Barasentosa Lestari - Indonesia
- PNOC Exploration Corporation - Philippines
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- Romanian Commodities Exchange
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- White Energy Company Limited
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- Sojitz Corporation - Japan
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- Economic Council, Georgia
- India Bulls Power Limited - India
- VISA Power Limited - India
- Commonwealth Bank - Australia
- Sical Logistics Limited - India
- Bhoruka Overseas - Indonesia
- Mercuria Energy - Indonesia
- CNBM International Corporation - China
- Bharathi Cement Corporation - India
- AsiaOL BioFuels Corp., Philippines
- MS Steel International - UAE
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- Coal and Oil Company - UAE
- Sinarmas Energy and Mining - Indonesia
- Straits Asia Resources Limited - Singapore
- Kalimantan Lumbung Energi - Indonesia
- Planning Commission, India
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- Anglo American - United Kingdom
- Australian Coal Association
- Siam City Cement - Thailand
- Petrochimia International Co. Ltd.- Taiwan
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- Orica Australia Pty. Ltd.
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- Minerals Council of Australia
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- Africa Commodities Group - South Africa
- Asmin Koalindo Tuhup - Indonesia
- Lanco Infratech Ltd - India
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- Siam City Cement PLC, Thailand
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- Posco Energy - South Korea
- Leighton Contractors Pty Ltd - Australia
- Ambuja Cements Ltd - India
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- Indian Oil Corporation Limited
- Directorate Of Revenue Intelligence - India
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- Energy Link Ltd, New Zealand
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- Therma Luzon, Inc, Philippines
- Sarangani Energy Corporation, Philippines
- Standard Chartered Bank - UAE
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- Ceylon Electricity Board - Sri Lanka
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Semirara Mining Corp, Philippines
- ASAPP Information Group - India
- Salva Resources Pvt Ltd - India
- Alfred C Toepfer International GmbH - Germany
- Ministry of Mines - Canada
- Singapore Mercantile Exchange
- Renaissance Capital - South Africa
- Kideco Jaya Agung - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Manunggal Multi Energi - Indonesia
- Indogreen Group - Indonesia
- Indika Energy - Indonesia
- SMG Consultants - Indonesia
- Essar Steel Hazira Ltd - India
- Australian Commodity Traders Exchange
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