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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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Friday, 06 July 18
COAL PRICES HAVE REMAINED STRONG BUT ARE SET TO DECLINE - NAB
Coal spot prices have been highly volatile in recent years, with an upward trend since recent lows in April 2018, National Australia Bank says in i ...
Friday, 06 July 18
HOW FLEET SIZE, CORPORATE PROFILE AND STRATEGY ARE DECIDING FACTORS IN SELECTING AN APPROPRIATE FINANCING STRATEGY - PWC
KNOWLEDGE TO ELEVATE
The challenges that shipping companies are facing when selecting an appropriate financing strategy during the current per ...
Friday, 06 July 18
INDIA: GOVT TO RELAX CURBS ON INDIAN FIRMS CHARTERING FOREIGN SHIPS - HINDU BUSINESS LINE
The Ministry of Shipping is clearly in reform mode. On the heels of the recent relaxation of the cabotage law, which allows foreign flag vessels to ...
Friday, 06 July 18
AUSTRALIAN NEWCASTLE SPOT COAL PRICES HIT $120 FOR 1ST TIME SINCE 2012 - REUTERS
Australian thermal coal prices have broken through $120 per tonne for the first time since 2012, driven up by strong consumption in Asia and spot m ...
Thursday, 05 July 18
WHAT THE FAILED GLENCORE-TOHOKU COAL TALKS MEAN FOR THE MARKET - REUTERS
Electric utilities in Japan and other Asian countries are driving blind when it comes to coal prices after the failure of Japan’s Tohoku Elec ...
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- Independent Power Producers Association of India
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- Renaissance Capital - South Africa
- Wood Mackenzie - Singapore
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- Savvy Resources Ltd - HongKong
- McConnell Dowell - Australia
- Ministry of Finance - Indonesia
- IHS Mccloskey Coal Group - USA
- Merrill Lynch Commodities Europe
- SMC Global Power, Philippines
- Jindal Steel & Power Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Singapore Mercantile Exchange
- Jorong Barutama Greston.PT - Indonesia
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- Bank of Tokyo Mitsubishi UFJ Ltd
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- Global Business Power Corporation, Philippines
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- Simpson Spence & Young - Indonesia
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- Vedanta Resources Plc - India
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- LBH Netherlands Bv - Netherlands
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- Mintek Dendrill Indonesia
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- Xindia Steels Limited - India
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- Anglo American - United Kingdom
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- European Bulk Services B.V. - Netherlands
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- Sojitz Corporation - Japan
- San Jose City I Power Corp, Philippines
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- International Coal Ventures Pvt Ltd - India
- Binh Thuan Hamico - Vietnam
- Electricity Authority, New Zealand
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- The State Trading Corporation of India Ltd
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- Makarim & Taira - Indonesia
- Siam City Cement PLC, Thailand
- Edison Trading Spa - Italy
- The Treasury - Australian Government
- Orica Australia Pty. Ltd.
- Tata Chemicals Ltd - India
- Chamber of Mines of South Africa
- Commonwealth Bank - Australia
- Parry Sugars Refinery, India
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- Trasteel International SA, Italy
- Toyota Tsusho Corporation, Japan
- Altura Mining Limited, Indonesia
- White Energy Company Limited
- ICICI Bank Limited - India
- Indonesian Coal Mining Association
- Wilmar Investment Holdings
- Intertek Mineral Services - Indonesia
- Bhushan Steel Limited - India
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- Kartika Selabumi Mining - Indonesia
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- Indika Energy - Indonesia
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- Coal and Oil Company - UAE
- Romanian Commodities Exchange
- Planning Commission, India
- Thai Mozambique Logistica
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- CIMB Investment Bank - Malaysia
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- Asmin Koalindo Tuhup - Indonesia
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- Mjunction Services Limited - India
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- Alfred C Toepfer International GmbH - Germany
- Sical Logistics Limited - India
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- TNB Fuel Sdn Bhd - Malaysia
- Bukit Asam (Persero) Tbk - Indonesia
- Ministry of Transport, Egypt
- Billiton Holdings Pty Ltd - Australia
- Africa Commodities Group - South Africa
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- Sree Jayajothi Cements Limited - India
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- Kepco SPC Power Corporation, Philippines
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- Economic Council, Georgia
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- Maheswari Brothers Coal Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Semirara Mining Corp, Philippines
- Minerals Council of Australia
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- GAC Shipping (India) Pvt Ltd
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- Mercuria Energy - Indonesia
- Interocean Group of Companies - India
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- SN Aboitiz Power Inc, Philippines
- Price Waterhouse Coopers - Russia
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- Directorate Of Revenue Intelligence - India
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- Indian Oil Corporation Limited
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- Ceylon Electricity Board - Sri Lanka
- Rio Tinto Coal - Australia
- Riau Bara Harum - Indonesia
- Leighton Contractors Pty Ltd - Australia
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- Dr Ramakrishna Prasad Power Pvt Ltd - India
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- Samtan Co., Ltd - South Korea
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- Bulk Trading Sa - Switzerland
- Dalmia Cement Bharat India
- Mercator Lines Limited - India
- GVK Power & Infra Limited - India
- Malabar Cements Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Ministry of Mines - Canada
- New Zealand Coal & Carbon
- Kobexindo Tractors - Indoneisa
- Georgia Ports Authority, United States
- PTC India Limited - India
- Goldman Sachs - Singapore
- Eastern Coal Council - USA
- Gujarat Electricity Regulatory Commission - India
- PNOC Exploration Corporation - Philippines
- Indogreen Group - Indonesia
- IEA Clean Coal Centre - UK
- Bukit Makmur.PT - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Krishnapatnam Port Company Ltd. - India
- Thiess Contractors Indonesia
- MS Steel International - UAE
- Siam City Cement - Thailand
- Kapuas Tunggal Persada - Indonesia
- CNBM International Corporation - China
- Cement Manufacturers Association - India
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- Sakthi Sugars Limited - India
- Bharathi Cement Corporation - India
- Antam Resourcindo - Indonesia
- Energy Development Corp, Philippines
- Power Finance Corporation Ltd., India
- Heidelberg Cement - Germany
- Bahari Cakrawala Sebuku - Indonesia
- Australian Coal Association
- Globalindo Alam Lestari - Indonesia
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