February 26, 2016: Coronado IV LLC (“Coronado”), an affiliate of Coronado Group of Wilton, CT., and Anjean, W. Va., announces the execution of a definitive purchase agreement to acquire the Buchanan mine and associated estimated metallurgical reserves as well as estimated reserve positions in Virginia and Pennsylvania from CONSOL Energy of Canonsburg, Pa. for total consideration of $420 million, including $398 million cash payable at closing. Coronado Group currently operates mines in Greenbrier and Logan Counties, W. Va. with a capacity of 5mm tons per annum of high quality metallurgical coal used in steel production. The completion of this acquisition will result in Coronado Group and its affiliates, including Coronado, owning in excess of 400mm tons of estimated reserves and becoming an integrated producer with 10mm tons of annual production capacity of all qualities of metallurgical coal necessary to make coke, all of which are expected to be in the lowest cost quartile of US producers.
Completion of the acquisition by Coronado is subject to a number of customary conditions including regulatory approvals. The parties expect to close the transaction by the end of March 2016.
Coronado is backed by The Energy & Minerals Group (“EMG”), a private equity group based in Texas.
Mr. Gerry Spindler, Chairman & CEO of Coronado stated: “Buchanan is a superb operation with an enviable reputation and exceptional management focused on safety. We are honored to have them as a part of our growing company, characterized by operations with minimal leverage which can navigate current markets and capitalize on projected pricing.”
Mr. John Calvert, Managing Partner & Co-Founder of EMG stated: “This acquisition is a perfect fit with our strategy of seeking high quality assets in the core commodities. The assets to be acquired are very favorably positioned at the bottom of the cost curve, forecast to generate positive free cash flow at current depressed prices and the acquisition is being undertaken on a 100% equity basis, thereby providing the business with significant financial flexibility. We are delighted to continue our long-standing relationship with the Coronado Group management team, which has a proven track record of value creation.”
About The Energy & Minerals Group:
EMG is the management company for a series of specialized private equity funds. The Firm was founded by John Raymond (majority owner and CEO) and John Calvert in 2006. EMG focuses on investing across various facets of the global natural resource industry including the upstream and midstream segments of the energy complex. As of September 30, 2015, EMG has approximately $16.5 billion of regulatory assets under management (RAUM). For additional information, please visit www.emgtx.com.
This press release contains forward-looking statements (as defined in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended) concerning future events and Coronado’s growth and business strategy. Words such as “expects,” “will,” “intends,” “plans,” “believes,” “anticipates,” “estimates,” and variations on such words and similar expressions are intended to identify forward-looking statements. Although Coronado believes that the expectations reflected in such forward-looking statements are reasonable, no assurance can be given that such expectations will prove to have been correct. These statements involve known and unknown risks and are based upon a number of assumptions and estimates that are inherently subject to significant uncertainties and contingencies, many of which are beyond the control of Coronado. Actual results may differ materially from those expressed or implied by such forward-looking statements.