Bens Creek Group plc, the owner of a metallurgical coal mine in North America, has entered into its first offtake agreement for its washed Hi-Vol-B metallurgical coal (product) with Integrity Coal Sales, Inc. New York. The agreement is for approximately 22 000 short tpm of product for an initial 12-month period, starting from January 2022 until December 2022. This agreement covers approximately 50% of the anticipated production volumes of the group's proposed annual production under the existing mine plan.
Integrity, founded in 1990, is a supplier of high-quality US metallurgical coal to the global marketplace. In addition to its headquarters in New York, Integrity has offices in the coal producing regions of Pennsylvania, West Virginia, and Kentucky as well as Virginia and Maryland.
The agreed sales price will be closely linked to the Metallurgical Coal Assessment Index published by S&P Global Platts on a daily basis. The published price for the Hi Vol B product, as at 19 October 2021, was US$305/t with the equivalent price for a short tonne being US$277. The sales price will be calculated, subject to a volume discount, using a formula linked to the 20 day average price prior to assignment of the product to Integrity.
The company's admission document, published on 13 October 2021, stated that the group was in discussions with various minerals brokers with a view to entering into an offtake agreement for all of the group's output from the mine and that the group expected to finalise an offtake agreement in 4Q21. The company has therefore completed an initial agreement with Integrity and entered into its first offtake agreement following admission of the company's ordinary shares to trading on AIM on 19 October 2021.
Adam Wilson, CEO of Bens Creek, commented: “Bens Creek has had a strong start as an AIM quoted company. We are delighted that strong investor demand at the time of our very recent IPO has been followed by strong customer demand for our product. We are therefore pleased to have secured the company's first offtake agreement with Integrity Coal Sales, a stalwart in the US coal industry, at close to prevailing market prices, for approximately 50% of our expected annual production plan. As we look to move into production during 4Q21, we will in due course seek to secure additional sales agreements with Integrity or with third-party customers.
“Our primary objective remains to move the first underground mine into production by the end of 4Q21 and following our listing on AIM, we are deploying certain of the net proceeds of our placing in pursuit of this work programme and to ensure the necessary steps are taken towards meeting this primary objective for the benefit of all shareholders.”
Read the article online at: https://www.worldcoal.com/coal/25102021/bens-creek-announce-offtake-agreement-with-integrity-coal-sales/