FISHERS, IN / ACCESSWIRE / February 21, 2019 / American Resources Corporation (NASDAQ: AREC), a supplier of raw materials to the rapidly growing global infrastructure marketplace, with a primary focus on the extraction, processing, transportation and selling of metallurgical coal to the steel industry, announced today the acquisition of a large contiguous metallurgical coal reserve from Colonial Coal, Inc. and Empire Coal Holdings LLC for approximately $26.9 million in a primarily all-stock transaction. Located in Pike County, Kentucky, the acquired coal reserve consists mainly of high-vol A and high-vol B coking coal used by steel mills and is strategically situated about 20 miles east of the company's McCoy Elkhorn Coal Complex.
The transaction involves the purchase of over 3,000 mineral acres and similar number of surface acres, and including all associated agreements, leases, and easements. As evidenced by the success of the Company's hub and spoke model, the acquisition provides American Resources with both strategic and financial benefits including:
- Access to High-Quality Metallurgical Coal
The acquired coal reserve consisting of high-vol A and high-vol B metallurgical coal within well-known coal seams including the Upper Banner, Glamorgan, Pond Creek, Cedar Grove, Upper Alma, Lower Alma and Williamson.
- Attractive Production Potential
Through this acquisition, the company can significantly increase its production of high-quality coking coal given its current coal sales contracts and demand.
- Cost Synergies
American Resources, through its existing M&A model, is completing its full and immediate integration process of the acquired assets resulting in no additional SG&A costs to the Company.
- Coal Blending / Quality
The future production from the acquired assets will further enhance the company's coal blending capabilities, sales volumes, and operating margins given the complimentary qualities to the Companies existing metallurgical products.
- Expansion Capabilities
With the addition of the acquired reserve, the company remains one of the most active and viable consolidators of metallurgical coal assets in eastern Kentucky and will continue to explore opportunities to expand its footprint where it's a strategic fit.
''American Resources remains committed to executing on its growth objectives and to create shareholder value, while delivering to our customers in the steel industry for the growing infrastructure marketplace'', stated Mark Jensen, CEO of American Resources Corporation. ''This latest acquisition represents our intent to further develop our metallurgical coal platform and gives us the ability to expand our volumes, sales and margins while enhancing our coal blending capabilities to meet a variety of our customers' needs. We applaud the prior owners of the assets for putting together such a strong asset base and welcome them as shareholders of American Resources Corporation!''
American Resources Corporation continues to focus on its growth objective by efficiently leveraging its large number of core mining permits and through identifying strategic, supplemental acquisitions and continuing to consolidate quality coal assets for future growth and production. The company is committed to being one of the lowest cost operators in CAPP and throughout all its coal mining, processing, and transportation operations.
About American Resources Corporation
American Resources Corporation is a supplier of raw materials to the rapidly growing global infrastructure marketplace. The company's primary focus is on the extraction, processing, transportation and selling of metallurgical coal and pulverized coal injection (PCI) to the steel industry. The company operations are based in the Central Appalachian basin of eastern Kentucky and southern West Virginia where premium quality metallurgical products are located.
The company's business model is based on running a streamlined and efficient operation to economically extract and deliver resources to meet its customers' demands. By running operations with low or no legacy costs, American Resources Corporation works to maximize margins for its investors while being able to scale its operations to meet the growth of the global infrastructure market.
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Special Note Regarding Forward-Looking Statements
This press release contains forward-looking statements. Forward-looking statements involve known and unknown risks, uncertainties, and other important factors that could cause the Company's actual results, performance, or achievements or industry results to differ materially from any future results, performance, or achievements expressed or implied by these forward-looking statements. These statements are subject to a number of risks and uncertainties, many of which are beyond the control of the Company. The words ''believes'', ''may'', ''will'', ''should'', ''would'', ''could'', ''continue'', ''seeks'', ''anticipates'', ''plans'', ''expects'', ''intends'', ''estimates'', or similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain such identifying words. Any forward-looking statements included in this press release are made only as of the date of this release. The Company does not undertake any obligation to update or supplement any forward-looking statements to reflect subsequent events or circumstances. The Company cannot assure you that the projected results or events will be achieved.
SOURCE: American Resources Corporation
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