Royal Coal having trouble paying for required financial disclosure

Royal Coal (TSX VENTURE: RDA) (FRANKFURT: RLC), which has mines in eastern Kentucky, said April 19 that it will be delayed in the filing of its annual financial statements for the year ended Dec. 31, 2011, accompanying management’s discussion and analysis, related CEO and CFO certifications and its annual information form.

These documents will not be filed within the time period prescribed by applicable securities legislation and will be delayed indefinitely, Royal Coal said. “The indefinite delay in filing the 2011 Annual Filings will occur as a result of the Company’s current inability to fund the operation of its business, including the costs of completing the 2011 Annual Filings,” the company added.

Royal Coal is a coal exploration and production company, headquartered in Toronto, Canada, with a regional office in Hazard, Ky.

Royal Coal had said on April 13 that it has received a statement of claim from Sandstorm Metals & Energy (US) Inc. and Black Bullet Coal LLC (an assignee of Sandstorm), in the Perry County, Ky., Circuit Court. That claim was against Royal Coal and subsidiaries including CDR Sid MiningCDR OperationsCDR Minerals (USA)CDR Big Branch and CDR Laurel Fork. The statement of claim relates to the alleged material breach by the Royal Coal and its subsidiaries of a coal production payment agreement, an additional coal purchase agreement, and a royalty agreement that provide for a commodity purchase and loan arrangement between these companies.

“At this time, the company cannot meet its current obligations to Sandstorm and its other creditors,” Royal Coal said in the April 13 announcement. “The company is in discussions with Sandstorm to come to a mutually beneficial resolution and avoid litigation.”

About Barry Cassell 20414 Articles
Barry Cassell is Chief Analyst for GenerationHub covering coal and emission controls issues, projects and policy. He has covered the coal and power generation industry for more than 24 years, beginning in November 2011 at GenerationHub and prior to that as editor of SNL Energy’s Coal Report. He was formerly with Coal Outlook for 15 years as the publication’s editor and contributing writer, and prior to that he was editor of Coal & Synfuels Technology and associate editor of The Energy Report. He has a bachelor’s degree from Central Michigan University.