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Allegiance Coal announces Black Warrior coal test results

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World Coal,

Allegiance Coal Ltd has announced the first set of results from the carbonisation tests undertaken on the Black Warrior Mine’s premium Mary Lee and Blue Creek coking coals.

Black Warrior carbonisation tests

The first test was a 50:50 blend of Mary Lee and Blue Creek, which the company is selling as a blended product. These two coal seams share the same properties and variously throughout the Black Warrior Basin come together as a single coal seam. They are typically sold together under the ‘Blue Creek’ brand.

The large scale semi-industrial carbonisation test undertaken in a moveable wall oven at DMT Germany, delivered a CSR result of 61% making it comparable with high vol A hard coking coals from the US.

Two additional carbonisation tests will be undertaken on each of the Mary Lee and Blue Creek seams individually purely for coal quality data purposes.

The two sold Black Warrior cargos of Mary Lee Blue Creek were priced at a discount to high-vol B indices at the time of each sale due to the lack of respected laboratory data to support coke strength.

Notwithstanding this, the company was very pleased with the prices achieved in those sales but are now in a position to negotiate pricing linked to high vol A indices for future sales, which as of week commencing 3 January 2022 was trading at US$340/t FOB US East Coast.

Black Warrior sold cargos update

The 55 000 t Black Warrior cargo sold (as announced on 15 December 2021) through a major international commodity trading house (who contributed 25 000 t to the 80 000 t vessel) will load week commencing 17 January 2022.

Black Warrior has moved the majority of its coal to McDuffie Terminal, Port of Mobile, with the last set of barges loaded onto the Black Warrior River for its four day journey to the Coal Terminal.

The second sale of 80 000 t of Black Warrior coal (also as announced on 15 December 2021) has a laycan fixed for 20 February – 2 March 2022.

Discussions with market participants for future sales will commence this month, and these sales are expected to be negotiated against high vol A price indices.

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