Rhino Resource Partners LP has closed on an agreement with Blackjewel LLC and related entities to purchase certain assets from Blackjewel for cash consideration of $850,000 plus an additional royalty of $250,000 that is payable within one year from the date of the purchase, as well as the assumption of associated reclamation obligations. The assets were purchased through a new wholly-owned subsidiary of Rhino, Jewell Valley Mining LLC, and consists of three underground, mid-vol metallurgical coal mines in Virginia that were actively producing coal prior to Blackjewel’s bankruptcy filing, along with a preparation plant, rail loadout facility, related mineral and surface rights and infrastructure, and certain purchase contracts to be assumed by Rhino.
“We are pleased to announce this acquisition of high quality, mid-vol metallurgical coal assets in Virginia that will enable the coal miners in the area to return to work,” President and CEO of Rhino Rick Boone said. “We have begun the process of hiring key personnel for these operations as we look to return these mines to their full production capacity.
Boone said they are also looking at expanding production based on market demand for this high quality mid-vol coal. “We have already met with the primary existing customer for this coal and they look forward to these mines resuming production as we believe this quality coal is key to the customer’s operations,” he added.
This acquisition provides Rhino with a high demand, mid-vol coal it did have in its portfolio of coal qualities.
Colbeck Capital Management LLC approved a $5 million delayed draw per the terms of our current financing agreement to provide the funds needed to refurbish these operations.
“This acquisition will provide many of the miners affected by this bankruptcy with the opportunity to return to work and we believe these assets will provide significant financial return that will provide long-lived value to Rhino’s unitholders,” the company said.
