Railroad, Operational and Acquisition Update (5694B)
April 18 2012 - 4:00AM
UK Regulatory
TIDMATC
RNS Number : 5694B
Atlantic Coal PLC
18 April 2012
Atlantic Coal plc / Index: AIM / Epic: ATC / Sector: Mining
18 April 2012
Atlantic Coal plc ("Atlantic" or the "Company")
Completion of Norfolk and Southern railroad diversion,
operational update and acquisition update
Atlantic Coal plc, the AIM listed opencast coal production and
processing company with activities in Pennsylvania, USA, is pleased
to announce the completion of the Norfolk and Southern railroad
diversion at its Stockton colliery ("Stockton") together with an
operational update at Stockton.
Highlights
-- Completion of the Norfolk and Southern Railroad Diversion
allowing the working of over approximately 1.0 million tons ("Mt")
of coal of previously unworkable reserves
-- An independent mining report highlights that, with the
diversion complete, production of 160,000 tons of clean coal per
annum is achievable in 2012
-- Existing equipment provides sufficient capacity to achieve
production targets at Stockton - delivery of the second Liebherr
excavator now expected in H2 2012
Atlantic Managing Director, Steve Best, said, "I am delighted to
announce that the railroad at Stockton has now been diverted with
the first train travelling over the diversion on Sunday 15 April
2012. With this in place, we can now advance plans to increase coal
production at Stockton and at the same time improve efficiency at
the site for the remainder of 2012 and beyond. Underpinning this
strategy, independent consultants have confirmed that production of
160,000 tons per annum of clean coal at Stockton is achievable
during 2012. In calculating this production rate, Mine Engineers
Inc. assessed both the mine's current operational capacity as well
as the positive impact of the completion of the rail line
diversion. Combined with strong demand and higher prices for
Pennsylvania anthracite, we look to the remainder of 2012 with
confidence.
"Stockton provides the Company with a solid regional footprint
from which to acquire further properties in the area. As announced
earlier in the year, we have acquired options over two prospective
anthracite projects and we are currently conducting due diligence
on those assets. Further updates will be made at the appropriate
time."
Railroad diversion
The Norfolk and Southern Railroad has now been diverted away
from the future extraction area at Stockton, allowing the working
of over approximately 1.0 Mt of coal of previously unworkable
reserves included in Atlantic's original competent persons report
in 2007. This diversion is also expected to allow more efficient
working of the remaining reserves at Stockton.
Operational update
An independent mining report has been produced by Mine Engineers
Inc. in order to evaluate the Company's mine plan and operations at
Stockton. The report has highlighted that, with the diversion of
the railroad now complete, production of 160,000 tons of clean coal
is achievable for the year to 31 December 2012. This would
represent a considerable improvement on the 106,403 tons production
of clean coal achieved in 2011. The projected 2012 strip ratio of
17:7 set out in the independent mining report also compares
favourably to the 2010 and 2011 strip ratios of approximately 32:1,
leading to a significant increase in operating efficiencies at
Stockton.
The new Liebherr 9250 19-yard bucket hydraulic excavator
("Liebherr"), originally anticipated to be operational in Q1:2012,
will now not be delivered until H2:2012. However, the Company's
existing Liebherr and the recently acquired PC-2000 excavator will
provide sufficient excavator capacity to achieve production targets
at Stockton and it is envisaged that the new Liebherr will be put
to work at one of the potential acquisition sites.
Potential Acquisitions Update
On 3 January 2012, the Company announced that it had entered
into a lease option agreement with Reading Anthracite Company
("RAC"), an established operator in Pennsylvania's anthracite coal
industry, over the fully permitted 410 acre Pott & Bannon
anthracite mining property in New Castle Township, Schuylkill
County, Pennsylvania. If Atlantic chooses to exercise this lease
option, the consideration payable to RAC will be c. US$6.0 million
in cash and Atlantic shares plus the grant of US$3.0 million worth
of warrants in Atlantic at 0.75 pence per share. The Directors
anticipate that the cash component will be satisfied from
Atlantic's existing cash resources. Further details of the lease
position and the 410 acre Pott & Bannon anthracite mining
property are set out in the announcement dated 3 January 2012.
Additionally, on 15 February 2012 the Company announced that it
had entered into an option agreement to acquire additional
anthracite mining assets in Pennsylvania. This option, which is
exercisable entirely at the Company's discretion, has an exercise
price of US$35 million and the exercise period ends on 31 October
2012. Further details of this additional option are set out in the
announcement of 15 February 2012.
Due diligence on both the potential acquisitions is progressing
and further announcements will be made at the appropriate time.
**ENDS**
For further information on the Company, visit:
www.atlanticcoal.com or contact:
Steve Best Atlantic Coal plc Tel: 020 3328 5670
Nick Naylor Allenby Capital Limited Tel: 020 3328 5656
Mark Connelly Allenby Capital Limited Tel: 020 3328 5656
Alex Price Allenby Capital Limited Tel: 020 3328 5656
Andy Frangos Cornhill Capital Ltd Tel: 020 7710 9618
Hugo de Salis St Brides Media & Finance Tel: 020 7236 1177
Ltd
Elisabeth Cowell St Brides Media & Finance Tel: 020 7236 1177
Ltd
This information is provided by RNS
The company news service from the London Stock Exchange
END
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