Atlantic Coal plc, which has a strip anthracite mining operation in Pennsylvania, said Oct. 29 that it has entered into an agreement to extend the deadline to exercise the option to acquire additional anthracite assets in Pennsylvania to March 31, 2013.
The option extension was signed on Oct. 25. The cash consideration for the option extension is US$75,000 which is non-refundable and payable immediately but which is to be applied in part satisfaction of the US$35m cash consideration payable to exercise the option should the company decide to exercise the option. Apart from extending the option exercise period, the terms of the option remain largely unchanged, except that the parties have agreed to potentially vary the consideration payable to exercise the option should U.S. federal or state taxes increase prior to exercise of the option. The option agreement remains exercisable entirely at Atlantic Coal’s discretion.
Since entry into the option agreement, which was first announced in February and had an option exercise deadline of Oct. 31, Atlantic Coal said it has undertaken significant due diligence on the assets in question. Also, Atlantic Coal has made significant progress regarding legal and accounting due diligence on the target assets. The company is also currently negotiating an off-take agreement for certain of the target’s anthracite assets and is in discussions on debt finance in order to fund or partially fund the consideration payable to exercise the option.