American Resources Corp. has entered into an agreement to acquire all of the assets of Synergy Coal, located in Wyoming County, West Virginia, in an all-stock transaction valued at $16 million. The acquisition includes all coal mining permits, including the associated reclamation bonds, governmental approvals, a coal processing facility, a rail loadout, more than 1,000 acres of mineral and surface ownership, and all other assets owned by Synergy Coal.

American Resources will create a fourth central Appalachian production hub, called Wyoming County Coal LLC. It would be the company’s first production complex in West Virginia. Wyoming County Coal has a fully-permitted and established mining, processing and transportation infrastructure. The company sees additional expansion opportunities in adjacent areas.

Similar to existing American Resources processing and loading facilities, once upgrades to the coal preparation plant and loadout are complete, the processing and rail loading infrastructure will have excess capacity to process and/or load third-party coal from other coal producers, increasing the facility’s efficiencies and lowering overall operating costs at the complex.

American Resources said it plans to begin development and expansion of the hub over the next 18 months with a goal of ramping up production from the complex starting in 2020. Initial production will target the mid-vol met coal found within the Eagle, Gilbert and Lower War Eagle coal seams, with an estimated coal deposit of more than 21 million tons and expandable with additional core drilling and analysis.

All future production will be processed and loaded to either truck or rail on site. The company intends to upgrade the 350 ton-per-hour prep plant at the site to increase the efficiency and production capabilities of the operation. There is also a loadout facility that has direct access on the Norfolk Southern Railway that will be upgraded to handle additional volumes and greater efficiency. Additionally, the complex has ample coal storage capacity in excess of 170,000 tons and a fully permitted refuse impoundment.

“We feel that this is a milestone acquisition for the future of American Resources,” CEO Mark Jensen said. “This not only expands our operational footprint into the state of West Virginia while further diversifying and enhancing our coal qualities, but it also validates our growth platform and value of our public company.”

Jensen said the company’s goal is to build out the complex to produce more than 2 million tons of production annually once completed. This will represent one-third of the company’s estimated yearly production target within the next five years.”

American Resources said it sees ample opportunity to expand their geological coal deposits around the complex in the future, while also exploring opportunities to offer third-party coal processing to other local operators without the processing or transportation infrastructure.

The company is currently finalizing a budget for capital required to bring the mines into production and rehabilitate the processing and rail loading infrastructure.