The assets in Meigs County, Ohio, and Mason County, West Virginia, include what is collectively known as the Gatling mining complex, encompassing all membership units of Gatling LLC, Gatling Ohio LLC, Meigs Point Dock LLC, Big River Mining LLC, Yellow Bush Mining LLC and Broad Run Dock LLC.

The Northern Appalachian complex, which produced about 250,000 tons per month at its peak in 2009, abuts the Ohio River on a 70,000-acre site and is within 75 miles of existing and operational coal-fired utilities, with an estimated 20-million-ton cumulative coal burn annually. It includes two permitted room-and-pillar underground mines in both West Virginia and Ohio, as well as a “substantial quantity” of mining equipment. An operational wash plant, conveyor systems, coal loading facility and a dedicated beltline to American Electric Power’s Mountaineer power plant are also included.

According to estimates by consultant Weir International, the Ohio mine has proven and probable reserves of approximately 121 million tons of coal, and the West Virginia mine 64 million tons of coal; fair market value as of March 26, 2014, was $75.35 million.

Royal confirmed that the underlying reserves and certain assets are owned by Natural Resource Partners (NRP), and leased to some Gatling entities on a per-ton royalty basis. NRP must also ink a modified lease agreement before the acquisition can close.

Cline will receive a 2% clean coal royalty, totaling $1.5 million, as part of the deal. The balance of $18.5 million will be paid in cash.

The entire transaction is scheduled to close on or before October 5.

In a related deal, Royal is now negotiating — hinging upon a closed letter agreement for the aforementioned transaction – with private Kentucky-based firm Jet Fuel LLC for an associated strategic partnership.

Jet was previously under agreement to purchase the Gatling entities and currently has a pending coal purchase agreement with the Mitchell power plant for 240,000 tons through the remainder of this year.