Royal Coal gets new sales contracts for 2012 for its US mines

Thursday, 29 Dec 2011

The Canadian Press reported that Royal Coal Corp, a Toronto-based junior miner with operations in the United States, says it has got a major new sales contract and has struck a deal to expand its coal output in Kentucky.

The company said that it has received contracts to deliver 234,000 tons of coal from its Appalachian mines at an average sales price of USD 85 a ton.

Moreover, in a separate development, Royal Coal said it had negotiated agreements to mine and sell coal from the Flatwoods mine in Kentucky on a contract basis.

Royal Coal said the sales contracts with coal fired power plant operators are key to the company's growth strategy.

Mr Tom Griffis chairman of Royal Coal said “These contracts are very attractive and give the company a solid foundation of sales for the upcoming year. The company is pursuing increased production from its own operations and permits as well as the potential of additional production through the acquisition of new assets. Royal Coal also anticipates new term contacts to be signed over the coming weeks for additional sales in 2012.”

Royal Coal has open pit coal mines in the central Appalachian coal producing region of the United States, which includes parts of West Virginia, Virginia, Kentucky, Ohio, and Tennessee.

(Sourced from canadianbusiness.com)

Canada's Grande Cache agrees to C$1 bln buyout

Mon Oct 31, 2011

* All-cash deal for Grande Cache worth about C$1 billion
* Winsway, Marubeni to pay C$10 per Grande Cache share
* Grande Cache shares surge 66 pct on the TSX
* Deal is part of M&A wave fueled by Chinese demand

TORONTO, Oct 31 (Reuters) - Canada's Grande Cache Coal has agreed to be acquired by Winsway Coking Coal and Marubeni Corp in a C$1 billion ($1 billion) deal fueled by demand from China's steelmakers.

Hong Kong-listed Winsway -- a supplier of coking coal to Chinese steelmakers -- and Japanese trading house Marubeni will pay C$10 cash for each share of Grande Cache, a 70 percent premium to the company's closing price on Oct. 28.

The offer, announced on Monday, is part of a flurry of deal activity in the global coal industry, including Peabody Energy's $5 billion offer to buy Australia's Macarthur Coal .

Miners are scrambling to capitalize on rising demand from China and Indiaeven as uncertainty surrounds the broad economic outlook. Producers of thermal coal, used in power plants, and coking or metallurgical coal, used to make steel, have both become targets.

Grande Cache, the most actively traded stock on the TSX on Monday, was also the biggest gainer on the day, up 66 percent to C$9.77 in early trading.

The Calgary, Alberta-based coking coal miner said its board unanimously approved the deal and believes that it is in the best interest of shareholders.

Directors and officers of the company have agreed to tender their shares in favor of the deal, the company said in a statement.

The company said it won't initiate talks with any other parties about a possible business combination.

Peabody is in the process of buying Macarthur on its own after ArcelorMittal , the world's largest steelmaker, pulled out of a joint $5 billion bid.

Earlier this month, New Hope , an Australian coal miner, put itself up for auction after receiving several approaches.

(sourced Reuters)

Coalspur reaches 14 year deal to ship thermal coal through Prince Rupert

Monday, 31 Oct 2011 | By CanadianBusiness

Coalspur Mines Ltd has reached a 14 year agreement for exporting thermal coal from its Alberta project site through the Ridley Terminals Inc. port in Prince Rupert, B.C.

The Australian company says the deal significantly decreases the risk of development at its flagship Vista coal mining project in Alberta which is estimated to contain 260 million tonnes of coal reserves.

Initial development costs at the project are expected to be about USD 580 million. Financial terms of the deal with Ridley were not disclosed.

The agreement includes the option for an additional 2.5 million tonnes per year for a total of 8.5 million tonnes. The 14 year term of the deal begins in January 2015 with the option to increase it for seven more years.

Coalspur said the deal also secures port requirements for a majority of the expected production at the open-pit thermal coal project.

The Vista project is beside a CN Rail line that runs to the deepwater port in Prince Rupert, giving the company access to Asian-Pacific countries, where there is growing demand for coal.

Trading of Coalspur shares was halted Thursday prior to the announcement. They closed at USD 2.01 up seven cents after trading resumed.

Mr Gene Wusaty managing director and CEO at Coalspur said "We are exceptionally pleased to have concluded this landmark agreement. It represents a major milestone in the development of Vista as it secures port allocation for the majority of the expected production until 2035. The agreement provides Coalspur committed access to the thermal coal markets in Asia and significantly de-risks the development of Vista as it advances towards the construction phase."

Ridley Terminals, a federal Crown corporation, is the most northern deepwater port in North America.

Mr Bud Smith chairman of Ridley Terminals said "This agreement represents a win-win as it facilitates Coalspur strategy to become the largest export thermal coal producer in Canada and positions Ridley Terminals to become a major gateway for Canadian thermal coal to the global markets."

Coalspur Mines is a coal exploration and Development Company with over 33,200 hectares of coal exploration leases in the Hinton region of Alberta.

Publication of a feasibility study at its Vista project is scheduled for early next year and construction is expected to follow.

Western Coal CEO to run Walter Energy after merger

Thursday, 03 Mar 2011 |Reuters|

Reuters reported that coal company Walter Energy Inc, which is in the process of buying Canada's Western Coal, said that Western CEO Mr Keith Calder will take the reins of the combined company after the deal is completed.

Walter Energy's interim CEO Mr Joe Leonard will step down from that position, but will remain on the company's board. The company said it expects the deal to close on April 1st 2011.

Walter agreed to buy Western Coal for USD 3.3 billion in December 2010, in a deal that will put it on track to becoming the world's No 3 producer of steel making metallurgical coal at a time of booming demand.

Mr Calder has been at the helm of Western Coal since late 2009 and was managing director of Rio Tinto's copper projects previously.

Western Coal has also nominated Mr Calder, Mr David Beatty and Mr Graham Marshall to serve on Walter's board.