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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 $6.4 million in common shares of NewLead. Such acquisition is subject to a number of terms and conditions and there is no assurance it will be consummated. The management company shall be responsible for managing the daily operations of the coal mines and the excavation of the coal from the properties.
For more details please visit www.newleadholdings.com.
Source: NewLead Holdings
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Tuesday, 11 December 18
SHIPPING MARKET ANALYSIS - ALLIED
A lot of discussions have been made as to the effects of the IMO 2020 regulation on OPEX levels, investment feasibility of& ...
Tuesday, 11 December 18
PORT OF NEWCASTLE SHIPPED 10.849 MMT OF COAL IN NOVEMBER DOWN 23.44 PERCENT MOM
COALspot.com: The Port of Newcastle, Australia’s major trading port and the world’s largest coal export port has shipped A$ 1,574.8 mil ...
Thursday, 06 December 18
IN THE EAST, BIGGER SUPRA WAS FIXED CA US$ 10K FOR INDO-CHINA COAL ROUND - FEARNLEYS
Capesize
There is cautious optimism for the Capes, with healthier volumes and improving rates in the Pacific. West Australia round is gradually ...
Thursday, 06 December 18
U.S. COAL CONSUMPTION IN 2018 EXPECTED TO BE THE LOWEST IN 39 YEARS - EIA
EIA expects total U.S. coal consumption in 2018 to fall to 691 million short tons (MMst), a 4% decline from 2017 and the lowest level since 1979. U ...
Thursday, 06 December 18
DEMAND RISKS WEIGH ON GLOBAL SHIPPING SECTOR OUTLOOK - FITCH RATINGS
The global shipping sector outlook remains negative reflecting the demand-side risks of protectionism and slower economic growth, Fitch Ratings say ...
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- Economic Council, Georgia
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- Riau Bara Harum - Indonesia
- Marubeni Corporation - India
- Coastal Gujarat Power Limited - India
- Edison Trading Spa - Italy
- Leighton Contractors Pty Ltd - Australia
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- Maharashtra Electricity Regulatory Commission - India
- Chettinad Cement Corporation Ltd - India
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- Directorate Of Revenue Intelligence - India
- Commonwealth Bank - Australia
- Ceylon Electricity Board - Sri Lanka
- Indonesian Coal Mining Association
- Borneo Indobara - Indonesia
- Rio Tinto Coal - Australia
- International Coal Ventures Pvt Ltd - India
- Sojitz Corporation - Japan
- PowerSource Philippines DevCo
- Bulk Trading Sa - Switzerland
- Agrawal Coal Company - India
- ASAPP Information Group - India
- Thiess Contractors Indonesia
- Kumho Petrochemical, South Korea
- The University of Queensland
- Siam City Cement PLC, Thailand
- Pipit Mutiara Jaya. PT, Indonesia
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- Gujarat Sidhee Cement - India
- OPG Power Generation Pvt Ltd - India
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- Global Coal Blending Company Limited - Australia
- Ambuja Cements Ltd - India
- SMG Consultants - Indonesia
- London Commodity Brokers - England
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- Sakthi Sugars Limited - India
- Sarangani Energy Corporation, Philippines
- Orica Australia Pty. Ltd.
- Goldman Sachs - Singapore
- Indo Tambangraya Megah - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Tata Chemicals Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
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- Ministry of Mines - Canada
- Kepco SPC Power Corporation, Philippines
- Maheswari Brothers Coal Limited - India
- Barasentosa Lestari - Indonesia
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- Karaikal Port Pvt Ltd - India
- Sindya Power Generating Company Private Ltd
- Vizag Seaport Private Limited - India
- TeaM Sual Corporation - Philippines
- Wilmar Investment Holdings
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- Africa Commodities Group - South Africa
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- IHS Mccloskey Coal Group - USA
- Independent Power Producers Association of India
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- New Zealand Coal & Carbon
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- Altura Mining Limited, Indonesia
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- Intertek Mineral Services - Indonesia
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- Planning Commission, India
- Simpson Spence & Young - Indonesia
- Chamber of Mines of South Africa
- Deloitte Consulting - India
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- Energy Link Ltd, New Zealand
- Coal and Oil Company - UAE
- PNOC Exploration Corporation - Philippines
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- Ministry of Transport, Egypt
- Cement Manufacturers Association - India
- Wood Mackenzie - Singapore
- Indian Oil Corporation Limited
- Eastern Coal Council - USA
- Therma Luzon, Inc, Philippines
- Sree Jayajothi Cements Limited - India
- PTC India Limited - India
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- Petrochimia International Co. Ltd.- Taiwan
- Directorate General of MIneral and Coal - Indonesia
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- Indian Energy Exchange, India
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- Romanian Commodities Exchange
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- GVK Power & Infra Limited - India
- Electricity Generating Authority of Thailand
- Mjunction Services Limited - India
- Jaiprakash Power Ventures ltd
- India Bulls Power Limited - India
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- Standard Chartered Bank - UAE
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- IEA Clean Coal Centre - UK
- Toyota Tsusho Corporation, Japan
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- The State Trading Corporation of India Ltd
- Global Green Power PLC Corporation, Philippines
- Bhatia International Limited - India
- Cigading International Bulk Terminal - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Asmin Koalindo Tuhup - Indonesia
- GAC Shipping (India) Pvt Ltd
- Bukit Asam (Persero) Tbk - Indonesia
- Xindia Steels Limited - India
- Bukit Makmur.PT - Indonesia
- Attock Cement Pakistan Limited
- Billiton Holdings Pty Ltd - Australia
- GMR Energy Limited - India
- Star Paper Mills Limited - India
- Vedanta Resources Plc - India
- Indogreen Group - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Energy Development Corp, Philippines
- Aditya Birla Group - India
- Australian Commodity Traders Exchange
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- Eastern Energy - Thailand
- White Energy Company Limited
- Bhoruka Overseas - Indonesia
- Heidelberg Cement - Germany
- Samtan Co., Ltd - South Korea
- GN Power Mariveles Coal Plant, Philippines
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