NewLead Holdings Ltd. (NASDAQ: NEWL) announced Jan. 9 that it has been granted access to develop and mine the Five Mile mine (on 7,695 mineral acres), that includes a CSX Transportation rail load facility, the Andy Rail Terminal, in Kentucky.
The company said it agreed to acquire this mine in 2012. As previously announced, NewLead has received a reserve report, dated May 2013, for the Five Mile mine, compliant with the U.S. Securities and Exchange Commission methodology, under which the estimated net present value of the mine is approximately $108m. The property contains approximately 8 million tons of proven and probable coal reserves. The CSX rail loadout is located only a half mile from the mine and has a loading capacity of 1,800 tons per hour, the company added.
Payment to the seller has commenced under to the program described in the Form 6-K filed with the SEC on Dec. 2, 2013, and it is expected that by the end of 2014, title to the Five Mile mine will be transferred to NewLead and the acquisition will be completed. The company estimates that the mine will begin generating revenue in the first quarter of 2014, once production commences.
Michael Zolotas, chairman and chief executive officer of NewLead, stated: “We are pleased to be able to develop the Five Mile mine in Kentucky. The close proximity of the CSX rail load facility to the mine allows for reduced transportation costs, which we believe provides a competitive advantage. In combination with the acquisition of the Viking mine and the wash plant in Kentucky, we are developing scale in our business.”
NewLead Holdings is an international, vertically integrated shipping and commodity company that manages product tankers and dry bulk vessels.