Xinergy Corp. was founded by management and operations teams with more than 50 years of collective coal industry experience within the Central and Southern Appalachian markets.
Xinergy to buy remaining Raven Crest interest in US$40m deal with JMP Coal
12th Mar 2010, 3:03 pm
Xinergy Ltd (TSX: XRG) has signed an agreement to acquire the remaining interest in West Virginia operating Raven Crest Mining from JMP Coal Holdings in a deal worth US$40m.
Xinergy bought a 5% stake in Raven Crest in December 2009 through its acquisition of Shenandoah Energy; JMP Coal Holdings currently owns 95%. Raven Crest operates surface coal mines in Boone County. Controlling approximately 17m recoverable tons of high quality coal reserves, the company had earnings (EBITDA) of US$21m in 2009.
"The acquisition of Raven Crest provides us with a great opportunity to obtain an additional quality operation and also has an immediate expected positive impact to our cash flow and earnings”, Xinergy CEO Jon Nix commented. “In combination with our existing sales, we will have in excess of 1.3 million tons committed in 2010 at an average sales price of approximately US$90 per ton and over 1.0 million tons committed in 2011 at an average sales price of approximately US$102 per ton”.
Xinergy, who has received a US$75m financing commitment from Marret Asset Management to fund the acquisition, expects the transaction to complete by April 30 2010. The company noted that Raven Crest is expected to have approximately US$25m in long-term debt at the closing of the transaction.
“We also believe that there are additional opportunities to significantly increase our reserve base at Raven Crest that could allow us to possibly expand production in the future ... our intentions are to create value for our stakeholders by acquiring properties that are not only immediately accretive, but also substantially increase our permitted reserve base to allow us to promptly bring on production as market conditions improve” Nix added.
No investment advice
The Company is a publisher and is not registered with or authorised by the Financial Services Authority (FSA). You understand and agree that no content published on the Site constitutes a recommendation that any particular security, portfolio of securities, transaction, or investment strategy is suitable or advisable for any specific person. You further understand that none of the information providers or their affiliates will advise you personally concerning the nature, potential, advisability, value or suitability of any particular security, portfolio of securities, transaction, investment strategy, or other matter.
You understand that the Site may contain opinions from time to time with regard to securities mentioned in other products, including company related products, and that those opinions may be different from those obtained by using another product related to the Company. You understand and agree that contributors may write about securities in which they or their firms have a position, and that they may trade such securities for their own account. In cases where the position is held at the time of publication and such position is known to the Company, appropriate disclosure is made. However, you understand and agree that at the time of any transaction that you make, one or more contributors may have a position in the securities written about. You understand that price and other data is supplied by sources believed to be reliable, that the calculations herein are made using such data, and that neither such data nor such calculations are guaranteed by these sources, the Company, the information providers or any other person or entity, and may not be complete or accurate.
From time to time, reference may be made in our marketing materials to prior articles and opinions we have published. These references may be selective, may reference only a portion of an article or recommendation, and are likely not to be current. As markets change continuously, previously published information and data may not be current and should not be relied upon.
