Westmoreland (WLB) to Acquire Kemmerer Mine in $193M Deal
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Westmoreland Coal Company (Nasdaq: WLB) has agreed to purchase Chevron Mining Inc.’s Kemmerer mine in the Hams Fork Region of southwestern Wyoming for $179 million plus approximately $14 million in working capital.
It is anticipated that the purchase price will be funded through a combination of cash consideration of approximately $74 million, plus the assumption of approximately $118.0 million in certain liabilities, including post retirement medical, pension, black lung, and asset retirement obligation liabilities. Over the last five years, Kemmerer has produced, on average, 4.7 million tons of high-quality sub-bituminous coal for sale to the adjacent Naughton power station, as well as various industrial customers located in the proximate geographic region.
The transaction includes approximately 118 million tons of coal reserves as of December 31, 2011, enough for 20 years of production; a skilled and stable workforce; recently installed state-of-the-art coal preparation and loadout facilities; strong customer commitments; and an expansive fleet of well maintained mining equipment. Additionally, substantially all of Kemmerer’s projected production for 2012 through 2016 is committed and priced under existing sales contracts.
From the release: "Consummation of the transaction is subject to certain customary conditions and approvals and has already been approved by the Board of Directors of Westmoreland and the appropriate governing bodies at Chevron Mining Inc. Gleacher & Company acted as financial advisor to Westmoreland. There can be no assurance that the transaction will be completed or that the anticipated benefits of the transaction will be realized."
It is anticipated that the purchase price will be funded through a combination of cash consideration of approximately $74 million, plus the assumption of approximately $118.0 million in certain liabilities, including post retirement medical, pension, black lung, and asset retirement obligation liabilities. Over the last five years, Kemmerer has produced, on average, 4.7 million tons of high-quality sub-bituminous coal for sale to the adjacent Naughton power station, as well as various industrial customers located in the proximate geographic region.
The transaction includes approximately 118 million tons of coal reserves as of December 31, 2011, enough for 20 years of production; a skilled and stable workforce; recently installed state-of-the-art coal preparation and loadout facilities; strong customer commitments; and an expansive fleet of well maintained mining equipment. Additionally, substantially all of Kemmerer’s projected production for 2012 through 2016 is committed and priced under existing sales contracts.
From the release: "Consummation of the transaction is subject to certain customary conditions and approvals and has already been approved by the Board of Directors of Westmoreland and the appropriate governing bodies at Chevron Mining Inc. Gleacher & Company acted as financial advisor to Westmoreland. There can be no assurance that the transaction will be completed or that the anticipated benefits of the transaction will be realized."
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