Atrum Coal NL teams with anthracite miner to fast track sales
Date
8/11/2016 7:26:38 AM
(MENAFN- ProactiveInvestors - Australia)
Atrum Coal NL (ASX:ATU) has entered into an option agreement with Atlantic Carbon Group PLC (ACG) for the supply of up to 100,000 tonnes of sized anthracite produced by ACG to various customers in Europe, South America and Asia in 2016.
Last week, Atrum entered into a binding agreement to acquire a 26.68% stake in ACG, a public, unquoted anthracite mining company operating in Pennsylvania, U.S.A.
The total consideration for the acquisition (combination of cash and shares) is $7.13 million.
ACG";s Stockton mine in Hazleton, Pennsylvania is the top anthracite producing pit in the U.S with an estimated mine life of 10 years.
The mine produced 204,746 tonnes in 2015, an increase of 24% on the previous year, enabling ACG to earn a profit before tax of US$5.4 million for 2015.
Under their new arrangement, Atrum and ACG will share profits generated by the sale of anthracite supplied by ACG to Atrum customers on a 50-50 basis.
The profits are determined after Atrum and ACG recover all their respective costs on production and transportation of the clean anthracite.
The agreement allows Atrum to start selling anthracite into export markets which are significantly undersupplied, prior to the development of its flagship Groundhog North Mining Complex in British Columbia, Canada.
A starter mine concept at Groundhog North has projected a net present value of US$239 million in a pre-feasibility study.
The acquisition of ACG stake is subject to shareholder approval at Atrum";s upcoming extraordinary general meeting (EGM). <
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