SEATTLE, Jan. 20 /PRNewswire-FirstCall/ -- L & L Energy, Inc. (OTC Bulletin Board: LLEN) ("L&L"), a U.S. coal operator serving China's vast coal market, today announced that through its subsidiary, Baoxing Economic and Trade Co., Ltd. ("Baoxing"), it has subcontracted the operation of the Ping Yi Coal Mine ("Ping Yi") located in Pingguan Town in Guizhou Province of China.
Under a fixed fee of approx. US$ 876,000 (or RMB 6 million) per year, payable either in cash or in L&L common shares, Baoxing is allowed to operate the Ping Yi coal mine facilities of 150,000 ton annual production. The agreement allows Baoxing to operate Ping Yi, to provide the necessary working capital, and to collect the respective revenue, net profits and/or losses of Ping Yi. Under the agreement, Baoxing is the exclusive provider of advisory and consultancy services to Ping Yi related to the Company's general business operations. Ping Yi's revenue, profit, or loss will be consolidated in L&L financial statements as a variable interest entity. L&L expects the agreement to generate approximate $15 million revenue per year, using $100 per ton coal price as a basis.
Ping Yi, a profitable coal mine with annual 150,000 tons of coal production and 31 million tons of proven coal reserves, has been in operation since 2007. Ping Yi is expanding its existing coal production capacity to 300,000 tons annually. Under terms of the agreement, Ping Yi has granted Baoxing an option to acquire Ping Yi's equity interests. The agreement covers a period of two years starting from November 1, 2009, and can be extended by mutual consent.
Dickson Lee, President and CEO of L&L, stated: "We're confident that Boaxing's subcontract of Ping Yi will be valuable to L&L's growth. This new development will extend more opportunities to us in the region."
For more information, see the Company's Form 8-K filed on January 19, 2010, available at www.sec.gov.
About L & L Energy
Founded in 1995 and headquartered in Seattle, L&L (http://www.LLenergyInc.com) focuses on serving the energy market in China. Through its subsidiaries, it operates profitable coal mines, coal wholesales, coking, and coal-washing facilities in Yunnan Province.
The statements contained in this document that are not statements of historical fact, including but not limited to, statements using terms such as "anticipate," "expect," "intend," "plan," "could," "should," and other expressions, including statements related to market trends and Company's future performance, are all "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 and involve a number of risks and uncertainties. The actual results of the future events described in the statements in this document could differ materially due to numerous factors and other made by the company filing with the Securities and Exchange Commission. Other than as required under the securities laws, the Company does not assume a duty to update these forward-looking statements.
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