BRISTOL, Tenn., Oct. 21, 2019 /PRNewswire/ -- Contura
Energy, Inc. (NYSE: CTRA), a leading U.S. coal supplier, today
announced the closing on October 18, 2019 of its
previously announced transaction with Eagle Specialty Materials,
LLC (Eagle Specialty Materials), an affiliate of FM Coal, LLC (FM
Coal), in connection with Eagle Specialty Materials' concurrent
acquisition of the Eagle Butte and Belle Ayr thermal coal mines
located in the Powder River Basin (PRB) in Campbell County, Wyoming (Western Assets).
On October 2, 2019, as part of the
bankruptcy proceedings for Blackjewel L.L.C., Blackjewel Holdings
L.L.C. and certain affiliated entities (all such debtor entities,
collectively, Blackjewel, or the Debtors), the U.S. Bankruptcy
Court for the Southern District of West
Virginia approved the sale by Blackjewel of the Western
Assets to Eagle Specialty Materials.
In connection with the closing of the transaction, the surety
bonding previously posted by Contura's subsidiary, Contura Coal
West, LLC (Contura Coal West), with the State of Wyoming Department
of Environmental Quality, Land Quality Division (DEQ) has been
replaced with substitute surety bonds arranged by Eagle Specialty
Materials in the amount of approximately $238 million, and neither Contura nor Contura
Coal West will have any liability in respect of those substitute
surety bonds. Pursuant to an agreement among Contura Coal West,
Eagle Specialty Materials, FM Coal and the United States Department
of Interior's Office of Surface Mining, Reclamation and Enforcement
(OSM), OSM has agreed that any bond forfeiture related to the mines
will not be linked to or held against Contura Coal West and OSM
will not link Contura Coal West to any Surface Mining Control and
Reclamation Act of 1977 violation by Eagle Specialty
Materials. Eagle Specialty Materials is expected to operate
the mines during the transfer process to Eagle Specialty Materials
of certain state permits held by Contura Coal West and certain
state and federal leases held by an affiliate of Blackjewel. Eagle
Specialty Materials has agreed to use commercially reasonable
efforts to cause the permits to be transferred as promptly as
possible.
"Closing this deal with Eagle Specialty Materials brings about a
positive result for our company and the many stakeholders involved
in this transaction," said chairman and chief executive officer,
David Stetson. "In our view, this
transaction represents a best-case-scenario outcome to a lengthy
and uncertain process, putting the mines in the hands of an
operator with a long-term interest in the Powder River Basin, and
getting hard-working coal miners back on the job."
As previously disclosed, Contura was a prior owner of the
Western Assets through its subsidiary, Contura Coal West, though
the company has not operated the mines since selling the assets to
Blackjewel in December 2017. Because
the permit transfer process relating to that transaction was not
completed prior to Blackjewel's filing for Chapter 11 bankruptcy
protection, however, Contura Coal West remains the permitholder in
good standing for both mines and has maintained bonding to cover
related reclamation and other obligations, as described above.
Pursuant to an agreement between Contura and Eagle Specialty
Materials, Contura paid to Eagle Specialty Materials cash
consideration of $81.3 million at
closing, has agreed to pay an additional $8.7 million into an escrow account to be used to
make payment in respect of a federal royalty claim against Contura
Coal West, has agreed to convey certain Wyoming real property to Eagle Specialty
Materials subject to certain conditions, has paid $13.5 million to Campbell County, Wyoming for ad valorem back
taxes, has waived its rights to the remaining $3.05 million of a purchase deposit provided to
the Debtors, and has released or waived certain other claims
against the Debtors or with respect to certain of their assets.
Eagle Specialty Materials has agreed to indemnify Contura and its
affiliates against all reclamation liabilities related to the
Western Assets and against federal, state and local claims for
royalties, ad valorem taxes and other amounts relating to the
Western Assets for the period beginning on December 8, 2017.
Contura Coal West expects to have returned to it approximately
$9.0 million of cash collateral
related to the surety bonds it previously posted that are being
released as part of this transaction.
ABOUT CONTURA ENERGY
Contura Energy (NYSE: CTRA) is a Tennessee-based coal supplier with affiliate
mining operations across major coal basins in Pennsylvania, Virginia and West
Virginia. With customers across the globe, high-quality
reserves and significant port capacity, Contura Energy reliably
supplies both metallurgical coal to produce steel and thermal coal
to generate power. For more information, visit
www.conturaenergy.com.
FORWARD-LOOKING STATEMENTS
This news release includes forward-looking
statements. These forward-looking statements are based on
Contura's expectations and beliefs concerning future events and
involve risks and uncertainties that may cause actual results to
differ materially from current expectations. These factors are
difficult to predict accurately and may be beyond Contura's
control. Forward-looking statements in this news release or
elsewhere speak only as of the date made. New uncertainties
and risks arise from time to time, and it is impossible for Contura
to predict these events or how they may affect Contura. Except
as required by law, Contura has no duty to, and does not intend to,
update or revise the forward-looking statements in this news
release or elsewhere after the date this release is issued. In
light of these risks and uncertainties, investors should keep in
mind that results, events or developments discussed in any
forward-looking statement made in this news release may not
occur.
INVESTOR
CONTACT
investorrelations@conturaenergy.com
Alex Rotonen, CFA
423.956.6882
MEDIA
CONTACT
corporatecommunications@conturaenergy.com
Emily O'Quinn
423.573.0369
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SOURCE Contura Energy, Inc.