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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, 26 February 13
10TH CLEAN COAL FORUM WILL BE HELD ON JUNE 2013
CDMC Events will be presenting the 10th Clean Coal Forum 2013 on June 13 - 14, 2013 in Beijing,China.
It will make you understand regulatory asp ...
Sunday, 24 February 13
COAL SWAPS INCH UP WEEK - ON - WEEK
COALspot.com - Sub-Bit Indonesia coal swaps (FOB ) for average Q2’ 2013 delivery has gained 0.17 percent and CFR South China coal shipme ...
Sunday, 24 February 13
BDI FELL 1.72 PERCENT BUT FREIGHT MARKET FAIRLY STEADY - VISTAAR
COALspot.com - This freight market has been fairly steady this week but, BDI fell1.72 pct and closed at 740 points.
The cape index also joins BDI ...
Saturday, 23 February 13
IHS MCCLOSKEY 20TH ANNUAL COAL CONFERENCE OF THE AMERICAS
IHS McCloskey 20th Annual Coal Conference of the Americas to be held on 13-14 March 2013 in Cartagena, Colombia
IHS is pleased to invite you to t ...
Thursday, 21 February 13
HANDY : THE PACIFIC MARKET GOT FIRMED UP AS CHINESE CAME BACK FROM HOLIDAYS - FEARNLEYS
Handy
The Atlantic saw more cargoes than last week but rates remained unchanged as lot of ships in the market. The USG-Feast was at USD 18k and Bla ...
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- Price Waterhouse Coopers - Russia
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- Electricity Authority, New Zealand
- Orica Australia Pty. Ltd.
- Manunggal Multi Energi - Indonesia
- Aditya Birla Group - India
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- Australian Commodity Traders Exchange
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- Larsen & Toubro Limited - India
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- MS Steel International - UAE
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- Ministry of Mines - Canada
- Jaiprakash Power Ventures ltd
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- Straits Asia Resources Limited - Singapore
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- Global Coal Blending Company Limited - Australia
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- Renaissance Capital - South Africa
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- Kalimantan Lumbung Energi - Indonesia
- Leighton Contractors Pty Ltd - Australia
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- The Treasury - Australian Government
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- Indika Energy - Indonesia
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- Metalloyd Limited - United Kingdom
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- Parliament of New Zealand
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- Energy Development Corp, Philippines
- Therma Luzon, Inc, Philippines
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- Bayan Resources Tbk. - Indonesia
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- PowerSource Philippines DevCo
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- Holcim Trading Pte Ltd - Singapore
- South Luzon Thermal Energy Corporation
- Singapore Mercantile Exchange
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- Bulk Trading Sa - Switzerland
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- Gujarat Electricity Regulatory Commission - India
- Binh Thuan Hamico - Vietnam
- Antam Resourcindo - Indonesia
- Coal and Oil Company - UAE
- Kapuas Tunggal Persada - Indonesia
- Interocean Group of Companies - India
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- Chettinad Cement Corporation Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
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- Miang Besar Coal Terminal - Indonesia
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- Mintek Dendrill Indonesia
- Semirara Mining and Power Corporation, Philippines
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- Wilmar Investment Holdings
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- Merrill Lynch Commodities Europe
- The State Trading Corporation of India Ltd
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- Thiess Contractors Indonesia
- Essar Steel Hazira Ltd - India
- Africa Commodities Group - South Africa
- Energy Link Ltd, New Zealand
- Savvy Resources Ltd - HongKong
- McConnell Dowell - Australia
- CIMB Investment Bank - Malaysia
- Maharashtra Electricity Regulatory Commission - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Dalmia Cement Bharat India
- IHS Mccloskey Coal Group - USA
- Eastern Energy - Thailand
- Makarim & Taira - Indonesia
- Jindal Steel & Power Ltd - India
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- CNBM International Corporation - China
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- Madhucon Powers Ltd - India
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- Kartika Selabumi Mining - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Georgia Ports Authority, United States
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Chamber of Mines of South Africa
- Orica Mining Services - Indonesia
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- Australian Coal Association
- Iligan Light & Power Inc, Philippines
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- Indogreen Group - Indonesia
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- Planning Commission, India
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- Baramulti Group, Indonesia
- Toyota Tsusho Corporation, Japan
- Tata Chemicals Ltd - India
- GVK Power & Infra Limited - India
- Deloitte Consulting - India
- AsiaOL BioFuels Corp., Philippines
- Bhatia International Limited - India
- Trasteel International SA, Italy
- San Jose City I Power Corp, Philippines
- Sree Jayajothi Cements Limited - India
- Romanian Commodities Exchange
- Ind-Barath Power Infra Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Electricity Generating Authority of Thailand
- Ministry of Finance - Indonesia
- Petron Corporation, Philippines
- The University of Queensland
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- Maheswari Brothers Coal Limited - India
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