Phoenix Coal Inc announced that the sale of its surface mining operations to Oxford Mining Company LLC, a major privately owned coal producer based in Ohio, closed on September 30th 2009.
Mr David A Wiley president & CEO of Phoenix Coal Inc said “Closing the transaction achieves critical objectives for both companies. For Oxford, the Muhlenberg County surface mining business will bring diversification to an already strong foundation of assets and people in Ohio. Most importantly, Phoenix is now in an outstanding position to execute on its primary objective, which is to maximize the value of the Gryphon Mining Complex. We continue to advance the development of this project, respond to solicitations and inquiries from potential customers, and secure additional property control while we evaluate all of our strategic options, including alternatives to monetize or joint venture the asset. After eliminating our long-term debt and strengthening our cash position from the Oxford transaction, we can now capitalize on Gryphon and potential opportunities in the market."
Mr Charles C Ungurean president & CEO of Oxford Mining said that “We are very excited about the acquisition of Phoenix' surface mining business. This transaction provides us an entry into Kentucky and the Illinois Basin and will significantly increase Oxford's scale, both from a coal reserve life and volume capacity standpoint. The Illinois Basin has been a key regional expansion focus for us due to its proximity to our existing operations and its similar mining techniques and terrain. Following this acquisition, Oxford will have annual production of approximately 8 million tons of surface-mined, low-chlorine bituminous coal. Additionally, Oxford is focused on expanding its relationship with overlapping customers and developing long-term, mutually beneficial relationships with new customers.”
After the Transaction, as of September 30, 2009, Phoenix will have a cash balance of approximately USD 22.4 million. An additional USD 3.3 million that has been escrowed due to certain provisions in the Transaction agreement is scheduled to be released over the next 18 months.
