Xinergy Ltd. completes aquisition of Kentucky coal assets
Toronto Stock Exchange: XRG
(All Amounts in $US unless otherwise stated)
KNOXVILLE, TN, Jan. 5, 2012 /PRNewswire/ - Xinergy Ltd. (TSX: XRG) (TSX: XRG.WT) ("Xinergy" or the "Company"), a US Central Appalachian producer of high quality coal, today announced that it has executed an Asset Purchase Agreement ("Purchase Agreement") pursuant to which it has acquired coal assets in Bell, Clay and Leslie counties, Kentucky, including reserves that significantly increase Xinergy's thermal coal reserve base in Kentucky by effectively expanding the reserve profile of the Company's Straight Creek mining complex.
"We are pleased to announce this latest acquisition which expands our mining operations in Central Appalachia" stated Bernie Mason, Xinergy's President. The additional reserves will nearly double the Straight Creek reserve base on a property at which our management team has a tremendous knowledge and operating experience. The close proximity of the reserves, which are immediately to the north of Straight Creek, will allow us to take advantage of certain synergies, including transporting the coal directly through Straight Creek utilizing our existing facilities, and utilizing Straight Creek's excess productive capacity."
Reserve Estimates and Transaction Details
The coal assets subject to the Purchase Agreement include leases, permits and equipment. The Company estimates there are 12,000 leased acres containing approximately 15 million tons of proven and probable reserves of which 4 million are permitted and which share a common boundary with Xinergy's current Straight Creek operations. The Company also receives a 600 ton per hour heavy media preparation plant with fully permitted refuse storage facility, a batch weigh unit train loadout on CSX railroad and miscellaneous surface and underground mining equipment including two highwall miner units.
The aggregate purchase price for the coal assets is approximately $13.4 million, including the replacement of $2.8 million of reclamation bond collateral at closing.
John Ledington, PE, Manager of Engineering for the Company has reviewed and confirmed the scientific and technical information within this news release relating to reserve estimates and serves as the Qualified Person as defined in National Instrument 43-101. An updated 43-101 technical report for Straight Creek including the recently acquired property is forthcoming.
About Xinergy Ltd.
Headquartered in Knoxville, Tennessee, Xinergy Ltd., through its wholly owned subsidiary Xinergy Corp. and its subsidiaries, is engaged in coal mining in eastern Kentucky, West Virginia and Virginia. Currently, Xinergy sells high quality coal to electric utilities and industrial companies throughout the south-eastern United States. For more information, please visit www.xinergycorp.com.
This release contains "forward-looking information" that includes information relating to future events and future financial and operating performance, including management's assessment of Xinergy's future outlook. Forward-looking information should not be read as a guarantee of future performance or results and will not necessarily be accurate indications of the times at, or by which, that performance or those results will be achieved. Forward-looking information is based on information available at the time it is made and/or management's good faith belief as of that time with respect to future events, and such information is subject to risks and uncertainties that could cause actual performance or results to differ materially from those expressed in or suggested by the forward-looking information. Important factors that could cause these differences include but are not limited to: the ability to negotiate and executive a definitive purchase agreement for the transaction; the ability to obtain any necessary third party approvals required for the transaction; conditions to the closing of the transaction may not be satisfied; the transaction may involve unexpected costs, unexpected liabilities or unexpected delays; the business of the Company may suffer as a result of uncertainty surrounding the transaction; the Company may be adversely affected by other economic, business, and/or competitive factors; changes in contracted sales, the business of the Company may suffer as a result of uncertainty surrounding the coal market; the Company may be adversely affected by other economic, business, and/or competitive factors; the worldwide demand for coal; the price of coal; the price of alternative fuel sources; the supply of coal and other competitive factors; the costs to mine and transport coal; the ability to obtain new mining permits; the costs of reclamation of previously mined properties; the risks of expanding coal production; the ability to bring new mines on line on schedule; industry competition; the Company's ability to continue to execute its growth strategies; and general economic conditions. These and other risks are more fully described in the Company's filings with the Canadian Securities Administrators, including its Annual Information Form for the year ended December 31, 2010, available on SEDAR at www.sedar.com. You should not put undue reliance on any forward-looking information. We assume no obligation to update forward-looking information to reflect actual results, changes in assumptions or changes in other factors affecting forward looking information, except to the extent required by applicable securities laws. If we do update one or more forward-looking information, no inference should be drawn that we will make additional updates with respect to those or other forward-looking information.
SOURCE Xinergy Ltd.