At present, Hallador/Sunrise expect to sell at least 4 million tons and 4.5 million tons in 2018 and 2019, respectively, at average realized prices of $44.03/ton and $44.55/ton, although those totals are expected to be updated later this year as sales efforts continue. They sold 7.4 million tons in 2015 and 5.3 million tons in 2014. About 5.3 million tons of this year’s production are projected to come from Sunrise’s two Oaktown underground mines in Knox County, Indiana, in particular, the Oaktown No. 1 continuous miner operation just east of U.S. 41 outside of town. The two lower-cost mines were acquired by Sunrise from Vectren Corp. of Evansville, Indiana, in August 2014.

At the same time, production has been significantly reduced at Sunrise’s once-flagship Carlisle underground mine in Sullivan County, Indiana. Output has averaged only about 5,000 tons a month recently at a mine that regularly produced 3 million tons annually for several years. However, Brent Bilsland, Hallador president and CEO, said this spring it is possible production could increase at Carlisle in 2017 if market supply/demand fundamentals become more balanced later this year as he suspects.

Under the $18.25 million transaction with Blackhawk, Sunrise picked up more than 14 million tons of proven and probable leased and owned reserves and related advanced royalties. Also included in the deal were rights under a coal sales agreement with an unidentified customer that extends through 2017. Blackhawk, based in Lexington, Kentucky, idled the Freelandville underground mine operated by its Triad Mining subsidiary, as a result of the sale. Bilsland said the purchase “increases our reserve base at our lowest-cost mine and creates a solid foundation of sales going forward. We feel this investment ensures the low-cost position of the Oaktown mine and solidifies the employment of our dedicated miners.” Sunrise expects to access the newly acquired Triad reserve from its Oaktown complex. Hallador is in the process of relocating from Denver, Colorado, to Terre Haute, Indiana, to be closer to its operations in the ILB.