CONSOL Energy Inc. has sold non-producing western Canadian coal assets in the closing days of 2012 for US$ 127 million in two separate transactions.
Ram River and Scurry Ram coal properties
In the first transaction, CONSOL partnered with Forbes & Manhattan Inc. (F&M), a private merchant bank headquartered in Toronto, Canada, for the sale of a portion of its metallurgical coal assets in Alberta, Canada. Ram River Coal Corp., a private Ontario company created by F&M to purchase the coal assets, acquired 100% of the Ram River and Scurry Ram coal properties a total of US$ 105 million, of which US$ 102.5 million is payable to CONSOL.
The Ram River coal property has an in-situ coal resource of approximately 380 million t and estimated washed coal product of approximately 75 million t.
Grassy mountain opencast mine
In the second transaction, CONSOL agreed to sell its interest in other coal assets, including the Grassy Mountain opencast mine, in Alberta for US$ 24 million. The buyer is Riversdale Resources, headquartered in Sydney, Australia. CONSOL's share of the recoverable reserves at Grassy Mountain is estimated to be 30 million t.
CONSOL anticipates closing this transaction during Q2 of 2013.
"These two sales represent a continuation of our successful strategy of pulling value forward and focusing on our near-term opportunity set," commented J. Brett Harvey, CONSOL chairman and CEO.
The US$ 127 million in cash from these sales, when combined with the previous 2012 asset sales of US$ 224 million, means that CONSOL sold assets in excess of US$ 350 million during the year. None of the assets sold in 2012 generated revenue during the year. The company expects to sell additional non-core assets in 2013.
Adapted from press release by Jonathan Rowland.
Read the article online at: https://www.worldcoal.com/coal/11012013/consol_sells_non_core_canadian_assets/