Patriot, which recently entered its second Chapter 11 bankruptcy case, said the sale would include “a substantial majority” of its holdings.

The contemplated transaction must first receive a Chapter 11 plan; it is also subject to the development of a definitive asset purchase agreement as well as U.S. Bankruptcy Court approval of the sale and other conditions.

Patriot officials said that, under the deal’s terms, Blackhawk will issue to its secured lenders new debt securities totaling approximately $643 million, plus Class B units providing them an ownership stake in Blackhawk.

Additionally, Blackhawk will assume or replace surety bonds for the reclamation and other liabilities on the assets the company is taking over.

“We feel strongly that the proposed transaction with Blackhawk is in the best interest of Patriot, and its employees and stakeholders,” Patriot President and CEO Bob Bennett said, noting that Patriot’s mining operations and customer shipments will continue during the sale process.

“Blackhawk shares our dedication to operational and environmental excellence, and this transaction creates a viable path forward in this challenging market environment, enabling our mining operations to continue serving customers and preserving jobs in the communities in which they operate.”

Negotiations between the two companies are ongoing as they work to establish a formal purchase agreement. Those assets not included in the Blackhawk deal will be part of a separate sale process.

Currently, Patriot has eight active operations in NAPP and CAPP. Blackhawk has five active mining complexes in CAPP and the ILB.