“We are pleased that we were able to reach an agreement with Armstrong Energy and its secured noteholders in order to ensure that these mines continue to operate after the bankruptcy process,” said Robert E. Murray, chairman, president and CEO of Murray Energy. “After this transaction is completed, Murray Kentucky and the lenders of Armstrong Energy will jointly own five mines that are strategically important in the Illinois Basin. These operations will complement our existing mines in the Illinois Basin.”

The transaction remains subject to approval by the United States Bankruptcy Court for the Eastern District of Missouri, which is administering Armstrong Energy’s chapter 11 bankruptcy case. The transaction would be implemented as part of Armstrong Energy’s proposed plan of reorganization, which has the support of the company’s secured noteholders and its Official Committee of Unsecured Creditors.

The new company will be a producer of low-chlorine, high-sulfur thermal coal, with five mines in the Illinois Basin, including three surface mines and two operating underground mines.

As of June 30, Armstrong Energy controlled more than 445 million tons of proven and probable coal reserves in western Kentucky. The new company will also own and operate the three existing coal processing plants and river dock coal handling and rail loadout facilities. Murray Kentucky will manage these mines, along with the coal preparation and shipment facilities, after this transaction has closed.

“This transaction will provide needed stability to the coal industry in Western Kentucky,” Murray said. “It will also provide operational consistency to our domestic customers and greater opportunity for coal sales into the international export markets.”

Murray Energy and Murray Kentucky are being advised by legal counsel Schulte Roth & Zabel LLP, in connection with this acquisition.