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Friday, 18 January 13
NEWLEAD HOLDINGS LTD. TO ACQUIRE TWO COAL PROPERTIES WITH ESTIMATED COAL RESERVES OF 18.6 MMT & 143.1 MMT
 NewLead Holdings Ltd. Announces Signing Agreement to Acquire Properties with Estimated Coal Reserves of 18.6 Million Tons; Signing Agreement to Acquire Properties with Estimated Coal Reserves of 143.1 Million Tons and Securing 3-year Coal Supply Contracts Expected to Generate $873.5 million of Revenue
NewLead Holdings Ltd., is an international, vertically integrated shipping and commodity company that manages product tankers and dry bulk vessels, yesterday announced that the Company has entered into an agreement to acquire title and excavation rights in properties containing 18.6 million tons of estimated coal reserves for $11.0 million.
According to a press release posted on Company’s website, NewLead also entered into an agreement to acquire ownership and leasehold interests in properties containing approximately 143.1 million tons of coal for $55.0 million. Michael Zolotas, President and Chief Executive Officer of NewLead, stated, "We have expanded our recently launched commodities business with the agreement to acquire an estimated 18.6 million tons of coal reserves. We are in the process of acquiring additional coal properties with reserves estimated at approximately 143.1 million tons. Once we have acquired all of the assets, our coal reserves will consist primarily of sub bituminous B coal, which is 13,500 BTU with low sulfur. We will also have 'Blue Gem' and 'Rich Mountain' seams of coal, highly sought after in the international market. We believe that our international shipping expertise will allow us to exploit the demand for these coal reserves."
Michael Zolotas continued, "In entering the mining business, we undertook to secure supply contracts for the coal reserves. Consequently, we entered into two agreements to supply coal to third parties. These agreements are expected to generate $873.5 million of revenue over a three-year period. Based on our projections of operating costs, we believe that these sales will have healthy margins and will generate significant cash flow with which to fund continued growth. We intend to supplement the supply agreements by allowing contract miners to mine and pay us a royalty for coal removed."
Coal and Natural Gas Reserve Acquisitions
As of December 28, 2012, NewLead entered into an agreement to acquire title and mineral excavation rights to 5,000 acres of land in Kentucky. The coal reserves in these properties are estimated to be approximately 18.6 million tons. The transaction is subject to execution and delivery of certain definitive agreements and other closing conditions, but is currently expected to close by January 29, 2013. There can be no assurance that the transaction will be consummated. The consideration of $11.0 million was paid in the form of notes maturing on January 29, 2013. The notes do not accrue interest, but remain subject to a guaranty by the initial purchaser and are secured by a mortgage lien and a security interest in the assets being purchased.
NewLead has also entered into an agreement to acquire ownership and leasehold interests in 18,335 acres in Tennessee containing coal and natural gas and other natural resources. The agreement contemplates that the Company will acquire rights, title, permits and leases to coal mines with total reserves estimated at 143.1 million tons. The transaction is subject to execution and delivery of certain definitive agreements and other closing conditions, but is currently expected to close in February 2013. There can be no assurance that the transaction will be consummated. The agreement contemplates that consideration of $55.0 million shall be payable in cash in two installments; $30.0 million at closing and the remaining $25.0 million on the first anniversary of the closing.
The estimated reserves stated above are as determined by independent appraisals. The methodology used by the independent appraisers was not compliant with the methodology required by the Securities and Exchange Commission ("SEC") in reserve reports and, accordingly, should not be relied upon. Such reserve information is only provided to give the best currently available information. NewLead is undertaking to obtain reserve reports that comply with SEC methodology. Such reports may differ materially from the information provided herein.
The properties in Tennessee and Kentucky also include natural gas wells and projects relating to extraction of timber, sand, gravel, fly ash and dimension stone. Third parties are currently extracting these commodities on the properties and paying royalties.
Coal Supply Contracts
NewLead signed two coal supply contracts with creditworthy counterparties for the sale of coal to such parties. Annual revenue from these two contracts is expected to be $184.7 million in the first year, $318.4 million in the second year and $370.4 million for the third and final year.
The first contract provides for the sale of 70,000 tons of coal per month for the first 12 months (840,000 tons annually), increasing to 140,000 tons per month for the second year (1.68 million tons annually) and 210,000 tons per month for the third year (2.52 million tons annually). All tonnage is subject to a variation of 5%. The price was established based on the prevailing market price for coal at the time the contract was entered into.
The second contract provides for the sale of 130,000 metric tons per month for the first 12 months (1.56 million metric tons annually), increasing to 210,000 metric tons per month for the second and third years (2.52 million metric tons annually). All tonnage is subject to a variation of 5%. The price was established based on the prevailing market price for coal at the time the contract was entered into.
NewLead intends to source the coal to meet such contracts from the estimated reserves discussed above, but to the extent it is unable to do so, it will be required to seek to source the coal from other suppliers at the prevailing prices.
Management Company
NewLead also entered into an agreement to acquire a local coal mining management company in exchange for compensation, paid in the form $3.0 million in common shares of NewLead and a warrant for $6.4 million in common shares of NewLead. Such acquisition is subject to a number of terms and conditions and there is no assurance it will be consummated. The management company shall be responsible for managing the daily operations of the coal mines and the excavation of the coal from the properties.
For more details please visit www.newleadholdings.com.
Source: NewLead Holdings
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Sunday, 20 January 13
Q1 & Q4 SUB-BIT FOB INDONESIA COAL SWAPS: FIRM
COALspot.com - Sub-Bit Indonesia coal swaps (FOB ) and CFR South China coal shipment for average Q1’ 2013 delivery have gained 0.81percent and ...
Sunday, 20 January 13
S7 & S8 ROUTE FREIGHT TREND IS EXPECTED TO BE FLAT TO SOFT THIS WEEK - VISTAAR
COALspot.com - The freight market was fairly steady with all the indices BDI up by 9.21 pct closing at 837 points. The Cape index was also sharply u ...
Friday, 18 January 13
DRY BULK MARKET ON THE RISE, ON STRONG DEMAND FOR CAPESIZE VESSELS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
The dry bulk market has continued its climbing trend yesterday, as the industry's benchmark, the Baltic Dry Index (BDI) was up by 39 points to 820. ...
Friday, 18 January 13
CAPESIZE : SIGNALS ARE MIXED BUT THE OVERALL TENDENCY IS POSITIVE - FEARNLEYS
Handy
The Atlantic market remained stable with USG-Feast fixed around USD 17k, according to fearnleys’s weekly report.
Continent / Medite ...
Tuesday, 15 January 13
GRANT SMITH APPOINTED GROUP MANAGING DIRECTOR OF BRAEMAR ADJUSTING
The Board of Braemar Adjusting is delighted to announce the appointment of Grant Smith as Group Managing Director of the company with immediate effe ...
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- Sakthi Sugars Limited - India
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- Kobexindo Tractors - Indoneisa
- Minerals Council of Australia
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- CIMB Investment Bank - Malaysia
- Sindya Power Generating Company Private Ltd
- Salva Resources Pvt Ltd - India
- Standard Chartered Bank - UAE
- Rio Tinto Coal - Australia
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- Chamber of Mines of South Africa
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- Thiess Contractors Indonesia
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- Eastern Energy - Thailand
- Renaissance Capital - South Africa
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- Parliament of New Zealand
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- GMR Energy Limited - India
- Economic Council, Georgia
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- IEA Clean Coal Centre - UK
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- Georgia Ports Authority, United States
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- Interocean Group of Companies - India
- IHS Mccloskey Coal Group - USA
- Parry Sugars Refinery, India
- Energy Link Ltd, New Zealand
- International Coal Ventures Pvt Ltd - India
- Siam City Cement - Thailand
- Bukit Baiduri Energy - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
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- Asia Pacific Energy Resources Ventures Inc, Philippines
- Bharathi Cement Corporation - India
- Price Waterhouse Coopers - Russia
- Commonwealth Bank - Australia
- Bahari Cakrawala Sebuku - Indonesia
- Jindal Steel & Power Ltd - India
- Barasentosa Lestari - Indonesia
- Edison Trading Spa - Italy
- Sarangani Energy Corporation, Philippines
- New Zealand Coal & Carbon
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- Binh Thuan Hamico - Vietnam
- CNBM International Corporation - China
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- Australian Coal Association
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- San Jose City I Power Corp, Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
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- India Bulls Power Limited - India
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- Petron Corporation, Philippines
- Semirara Mining Corp, Philippines
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- Merrill Lynch Commodities Europe
- The State Trading Corporation of India Ltd
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- Bukit Makmur.PT - Indonesia
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- Latin American Coal - Colombia
- Posco Energy - South Korea
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- Bangladesh Power Developement Board
- Samtan Co., Ltd - South Korea
- Leighton Contractors Pty Ltd - Australia
- Heidelberg Cement - Germany
- Karaikal Port Pvt Ltd - India
- Ministry of Transport, Egypt
- TNB Fuel Sdn Bhd - Malaysia
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- Indian Oil Corporation Limited
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- Indian Energy Exchange, India
- Alfred C Toepfer International GmbH - Germany
- Pendopo Energi Batubara - Indonesia
- Globalindo Alam Lestari - Indonesia
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- Malabar Cements Ltd - India
- Wood Mackenzie - Singapore
- LBH Netherlands Bv - Netherlands
- Krishnapatnam Port Company Ltd. - India
- Africa Commodities Group - South Africa
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- The Treasury - Australian Government
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- Holcim Trading Pte Ltd - Singapore
- Romanian Commodities Exchange
- Eastern Coal Council - USA
- Power Finance Corporation Ltd., India
- Indo Tambangraya Megah - Indonesia
- Coal and Oil Company - UAE
- Bulk Trading Sa - Switzerland
- Neyveli Lignite Corporation Ltd, - India
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- Straits Asia Resources Limited - Singapore
- Asmin Koalindo Tuhup - Indonesia
- Coastal Gujarat Power Limited - India
- Borneo Indobara - Indonesia
- Medco Energi Mining Internasional
- Planning Commission, India
- Riau Bara Harum - Indonesia
- Central Electricity Authority - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- The University of Queensland
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- Jaiprakash Power Ventures ltd
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