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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, 08 April 19
CHEAP COAL SWELLS IN SOUTHEAST ASIA, FOILING GLOBAL GREEN PUSH - NIKKEI
Southeast Asian countries are turning to low-cost coal to satisfy their surging electricity demand as the West shies away from the fossil fuel unde ...
Monday, 08 April 19
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INDONESIAN COAL PRICE REFERENCE PRICE PLUMMETS TO LOW NOT SEEN SINCE AUGUST 2017
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Sunday, 07 April 19
SHIP PASSAGE PLANS - NO ROOM FOR ERROR! - WATSON FARLEY & WILLIAMS
KNOWLEDGE TO ELEVATE
The English High Court’s judgment in Alize 1954 v Allianz Elementar Versicherungs AG (The CMA CGM Libra) is an impo ...
Sunday, 07 April 19
IMO 2020: READY OR NOT? - WOOD MACKENZIE
New Year’s Day 2020 is firmly marked in the calendar as the refining and shipping industries prepare for change.
The International Marit ...
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- Petron Corporation, Philippines
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- Billiton Holdings Pty Ltd - Australia
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- Ceylon Electricity Board - Sri Lanka
- Neyveli Lignite Corporation Ltd, - India
- Latin American Coal - Colombia
- Bangladesh Power Developement Board
- Timah Investasi Mineral - Indoneisa
- The University of Queensland
- GMR Energy Limited - India
- Port Waratah Coal Services - Australia
- India Bulls Power Limited - India
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- Planning Commission, India
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- Barasentosa Lestari - Indonesia
- Minerals Council of Australia
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- Trasteel International SA, Italy
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- Eastern Coal Council - USA
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- New Zealand Coal & Carbon
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- Deloitte Consulting - India
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- Jorong Barutama Greston.PT - Indonesia
- White Energy Company Limited
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- Banpu Public Company Limited - Thailand
- Wood Mackenzie - Singapore
- Energy Link Ltd, New Zealand
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- Economic Council, Georgia
- Ambuja Cements Ltd - India
- Salva Resources Pvt Ltd - India
- Sical Logistics Limited - India
- Romanian Commodities Exchange
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- Antam Resourcindo - Indonesia
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- Electricity Authority, New Zealand
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- Toyota Tsusho Corporation, Japan
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- GAC Shipping (India) Pvt Ltd
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- Ministry of Finance - Indonesia
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- Kohat Cement Company Ltd. - Pakistan
- Essar Steel Hazira Ltd - India
- Simpson Spence & Young - Indonesia
- Orica Mining Services - Indonesia
- Chamber of Mines of South Africa
- Sindya Power Generating Company Private Ltd
- Global Green Power PLC Corporation, Philippines
- Siam City Cement - Thailand
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- Interocean Group of Companies - India
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- Australian Commodity Traders Exchange
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- Orica Australia Pty. Ltd.
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- Karbindo Abesyapradhi - Indoneisa
- Straits Asia Resources Limited - Singapore
- Agrawal Coal Company - India
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- Merrill Lynch Commodities Europe
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- Savvy Resources Ltd - HongKong
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- Indian Energy Exchange, India
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- McConnell Dowell - Australia
- PowerSource Philippines DevCo
- The Treasury - Australian Government
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- Bank of Tokyo Mitsubishi UFJ Ltd
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- Directorate General of MIneral and Coal - Indonesia
- Altura Mining Limited, Indonesia
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- Samtan Co., Ltd - South Korea
- Bukit Makmur.PT - Indonesia
- IEA Clean Coal Centre - UK
- Energy Development Corp, Philippines
- Posco Energy - South Korea
- Power Finance Corporation Ltd., India
- Vedanta Resources Plc - India
- Commonwealth Bank - Australia
- Bhatia International Limited - India
- Parliament of New Zealand
- Thiess Contractors Indonesia
- VISA Power Limited - India
- Price Waterhouse Coopers - Russia
- Wilmar Investment Holdings
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- South Luzon Thermal Energy Corporation
- Africa Commodities Group - South Africa
- Pendopo Energi Batubara - Indonesia
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- Sree Jayajothi Cements Limited - India
- Therma Luzon, Inc, Philippines
- Kideco Jaya Agung - Indonesia
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- Aditya Birla Group - India
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- Pipit Mutiara Jaya. PT, Indonesia
- Indonesian Coal Mining Association
- Holcim Trading Pte Ltd - Singapore
- Georgia Ports Authority, United States
- The State Trading Corporation of India Ltd
- Parry Sugars Refinery, India
- TeaM Sual Corporation - Philippines
- Madhucon Powers Ltd - India
- Mercuria Energy - Indonesia
- Riau Bara Harum - Indonesia
- Meralco Power Generation, Philippines
- ICICI Bank Limited - India
- Singapore Mercantile Exchange
- Ministry of Transport, Egypt
- Bhushan Steel Limited - India
- Semirara Mining Corp, Philippines
- GN Power Mariveles Coal Plant, Philippines
- Dalmia Cement Bharat India
- Goldman Sachs - Singapore
- Renaissance Capital - South Africa
- Australian Coal Association
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- IHS Mccloskey Coal Group - USA
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- Kobexindo Tractors - Indoneisa
- Medco Energi Mining Internasional
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- Dong Bac Coal Mineral Investment Coporation - Vietnam
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- Maharashtra Electricity Regulatory Commission - India
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