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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, 15 February 13
2ND ANNUAL INDONESIA MINING 2013 CONFERENCE
Bringing Indonesia's Mining Stakeholders Together Towards Improving Mining Investment Climate & Operations
Following the success of th ...
Friday, 15 February 13
SCRAPPING TO RISE AS BULKER OWNERS SUFFER - DREWRY MARITIME RESEARCH
Drewry's latest Dry Bulk Forecaster report suggests that cash-strapped shipowners will scrap younger and younger ships this year as the dry bulk ma ...
Thursday, 14 February 13
HANDY: ATLANTIC "STABLE"; PACIFIC "QUIET" - FEARNLEYS
Handy
The Atlantic remain stable with rates for FH from USG around USD 18k. The Pacific remains quiet due to Chinese New Year holidays. Rates were ...
Thursday, 14 February 13
BIMCO FORECASTS MOSTLY HIGHER DRY BULK RATES FOR THE COMING WEEKS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
Higher steel demand is expected to keep dry bulk rates elevated during the next six weeks, according to the latest BIMCO forecast. The Organization ...
Wednesday, 13 February 13
6TH ANNUAL CBM CONFERENCE
The 6th Annual CBM conference which will be held in Singapore on 18-21 June 201 offers comprehensive insights into leading CBM projects in the Asia- ...
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- Planning Commission, India
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- Electricity Authority, New Zealand
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- Energy Link Ltd, New Zealand
- Lanco Infratech Ltd - India
- Sojitz Corporation - Japan
- Timah Investasi Mineral - Indoneisa
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- Samtan Co., Ltd - South Korea
- Bank of Tokyo Mitsubishi UFJ Ltd
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- Trasteel International SA, Italy
- Bukit Makmur.PT - Indonesia
- Wood Mackenzie - Singapore
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- Truba Alam Manunggal Engineering.Tbk - Indonesia
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- PowerSource Philippines DevCo
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- Thai Mozambique Logistica
- Directorate General of MIneral and Coal - Indonesia
- Port Waratah Coal Services - Australia
- Kepco SPC Power Corporation, Philippines
- Baramulti Group, Indonesia
- Bangladesh Power Developement Board
- OPG Power Generation Pvt Ltd - India
- Siam City Cement - Thailand
- Ministry of Finance - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Savvy Resources Ltd - HongKong
- Bhatia International Limited - India
- Banpu Public Company Limited - Thailand
- LBH Netherlands Bv - Netherlands
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- PNOC Exploration Corporation - Philippines
- ICICI Bank Limited - India
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- Heidelberg Cement - Germany
- Global Green Power PLC Corporation, Philippines
- Coal and Oil Company - UAE
- Vizag Seaport Private Limited - India
- Billiton Holdings Pty Ltd - Australia
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- Deloitte Consulting - India
- Independent Power Producers Association of India
- Uttam Galva Steels Limited - India
- Central Java Power - Indonesia
- Kohat Cement Company Ltd. - Pakistan
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- Karaikal Port Pvt Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- Mintek Dendrill Indonesia
- Chettinad Cement Corporation Ltd - India
- Global Coal Blending Company Limited - Australia
- European Bulk Services B.V. - Netherlands
- Australian Commodity Traders Exchange
- Indonesian Coal Mining Association
- The State Trading Corporation of India Ltd
- Videocon Industries ltd - India
- Indo Tambangraya Megah - Indonesia
- MS Steel International - UAE
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- Bhushan Steel Limited - India
- Energy Development Corp, Philippines
- Cement Manufacturers Association - India
- Maheswari Brothers Coal Limited - India
- Kideco Jaya Agung - Indonesia
- Bharathi Cement Corporation - India
- Rio Tinto Coal - Australia
- Jaiprakash Power Ventures ltd
- Anglo American - United Kingdom
- Altura Mining Limited, Indonesia
- Vedanta Resources Plc - India
- Kapuas Tunggal Persada - Indonesia
- Chamber of Mines of South Africa
- Ministry of Mines - Canada
- Economic Council, Georgia
- Marubeni Corporation - India
- SN Aboitiz Power Inc, Philippines
- Miang Besar Coal Terminal - Indonesia
- Price Waterhouse Coopers - Russia
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- Attock Cement Pakistan Limited
- Petron Corporation, Philippines
- Australian Coal Association
- Malabar Cements Ltd - India
- Grasim Industreis Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Romanian Commodities Exchange
- Maharashtra Electricity Regulatory Commission - India
- Agrawal Coal Company - India
- Semirara Mining Corp, Philippines
- TeaM Sual Corporation - Philippines
- Mjunction Services Limited - India
- Pendopo Energi Batubara - Indonesia
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- Oldendorff Carriers - Singapore
- Tata Chemicals Ltd - India
- Coalindo Energy - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Kartika Selabumi Mining - Indonesia
- Barasentosa Lestari - Indonesia
- ASAPP Information Group - India
- Aboitiz Power Corporation - Philippines
- GMR Energy Limited - India
- Wilmar Investment Holdings
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- Sree Jayajothi Cements Limited - India
- McConnell Dowell - Australia
- Directorate Of Revenue Intelligence - India
- Thiess Contractors Indonesia
- Global Business Power Corporation, Philippines
- Parliament of New Zealand
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- New Zealand Coal & Carbon
- CNBM International Corporation - China
- Holcim Trading Pte Ltd - Singapore
- Xindia Steels Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Mercator Lines Limited - India
- Salva Resources Pvt Ltd - India
- The Treasury - Australian Government
- GN Power Mariveles Coal Plant, Philippines
- SMC Global Power, Philippines
- Therma Luzon, Inc, Philippines
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- Kaltim Prima Coal - Indonesia
- Ceylon Electricity Board - Sri Lanka
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- Simpson Spence & Young - Indonesia
- AsiaOL BioFuels Corp., Philippines
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- Meralco Power Generation, Philippines
- Edison Trading Spa - Italy
- Eastern Coal Council - USA
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- Interocean Group of Companies - India
- Alfred C Toepfer International GmbH - Germany
- Coastal Gujarat Power Limited - India
- White Energy Company Limited
- Orica Australia Pty. Ltd.
- Ind-Barath Power Infra Limited - India
- Krishnapatnam Port Company Ltd. - India
- San Jose City I Power Corp, Philippines
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