NewLead Holdings Ltd. (OTC: NEWL) said Sept. 29 that it did not complete the agreement to acquire the ownership and leasehold interests of the Elk Valley mine and that it has not yet completed the acquisition of the title and excavation rights of the Five Mile mine, all as previously announced in January 2014.
In addition, the company said it did not complete the two coal supply contracts for the sale of coal to third parties, also as described in that prior announcement.
With respect to the Elk Valley mine, the agreement to acquire the Tennessee Property (the Elk Valley mine) terminated and is of no further force or effect, the company said. In 2013, due to a default under the lease agreement, NewLead assigned all rights under the permits, mining contracts and other mining assets relating to the Tennessee Property back to the seller.
Furthermore, with respect to the Five Mile mine, although the purchase price for the Five Mile mine assets (including mineral rights, surface rights and mining permits and the title of land ownership of the Five Mile mine including the Andy Terminal Railroad) has been fully paid, the transfer of the Five Mile mine assets has yet to occur. Additionally, according to Kentucky mining regulators, upon the successful transfer of the Five Mile mine, it is a precondition to the transfer of the permits for the replacement of the reclamation bonds for the transfer of the Five Mile mine assets.
The company did not complete the two coal supply contracts for the sale of coal to third parties that was expected to generate $873.5 million of revenue. The company said it was unable to complete such contracts due to the “collapse of coal prices,” as well as adverse coal market conditions, and also as a result that the coal was to be supplied not only from any coal produced from the mines the company.
In addition, with respect to the acquisition of a local coal mining management company, the company had stated that such acquisition “is subject to a number of terms and conditions” which included the completion of the acquisition of the Five Mile mine.
Currently, NewLead said its coal business consists of a coal preparation plant, which has entered into various coal processing agreements. However, there can be no assurance that it will be able to effectively manage those operations or expand those limited operations, or that any such operations will be successful now or in the future, the company added.
NewLead Holdings is an international vertically integrated shipping, logistics and commodity company providing ideal solutions for seaborne transportation of dry bulk commodities and petroleum products through owned and managed vessels. NewLead controls a fleet of ten vessels, including five dry bulk and five tanker vessels and manages one third party tanker vessel.