Toronto Stock Exchange: XRG
(All Amounts in $US unless otherwise stated)
KNOXVILLE, TN, July 27, 2011 /PRNewswire/ - Xinergy Ltd., (TSX:XRG and XRG.WT) ("Xinergy" or the "Company"), a US Central Appalachian producer of high quality coal, today announced that its wholly owned subsidiary, Xinergy of Virginia, Inc. has acquired True Energy, LLC ("True Energy") an active high volatility metallurgical surface mining operation in south-western Virginia.
Bernie Mason, Xinergy's President, said, "We are pleased to close on the True Energy transaction and add this operation to our growing portfolio of quality Central App assets. The team in Virginia is currently producing approximately 10-12 thousand tons per month and we believe we can increase that production to 200-240 thousand tons annually with limited capital expenditure."
Reserves Estimate and Transaction Details
Based on information provided by the previous owner and due diligence, the Company believes there are approximately 4 million tons of metallurgical reserves on the property. The Company has already begun the process to produce a reserve estimate compliant with NI43-101 standards, which will be filed within 45 days. The aggregate purchase price for True Energy was $18 million cash. Commenting on the deal, Xinergy's Chief Financial Officer, said, "The addition of an active metallurgical operation with additional reserves is a great transaction for our company and will be accretive to earnings in Q3 and beyond."
Jack Hagewood, PE, Regional Manager 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.
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: 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.