Net proceeds from the offering were approximately $68.3 million, after deducting underwriting discounts and estimated offering expenses. Rhino intends to use the net proceeds from this offering, and a related capital contribution by its general partner of approximately $10.4 million, to repay approximately $69.4 million of outstanding indebtedness under its credit facility and to reimburse affiliates of Wexford Capital LP.
Rhino produced about 4.7 million tons in 2009, bought another 2 million tons and sold about 6.7 million tons. The company, with 13 mines in Kentucky, Ohio, Colorado and West Virginia, is developing a new underground mine in Christian County, Ill., with a projected output of 3 million tons a year. Tenaska, an Omaha, Neb.-based independent power company, is developing the $3.5 billion Taylorville Energy Center coal gasification project in Christian County. However, Rhino said its new mine is being developed independently of Tenaska and will go forward regardless of whether Taylorville is built.
