Rhino Resource Partners LP Announces Acquisition of Blackjewel Virginia Assets
September 11, 2019 - Rhino Resource Partners LP (OTCQB: RHNO) (“Rhino” or the “Partnership”) today announced that it closed an agreement with Blackjewel L.L.C. and related entities (“Blackjewel”) to purchase certain assets from Blackjewel for cash consideration of $850,000 plus an additional royalty of $250,000 that is payable within one year from the date of the purchase, as well as the assumption of associated reclamation obligations. The assets were purchased through a new wholly-owned subsidiary of Rhino, Jewell Valley Mining LLC, and consist of three underground, mid-vol metallurgical coal mines in Virginia that were actively producing coal prior to Blackjewel’s bankruptcy filing, along with a preparation plant, rail loadout facility, related mineral and surface rights and infrastructure and certain purchase contracts to be assumed by Rhino.
Rick Boone, President and Chief Executive Officer of Rhino’s general partner, stated, “We are pleased to announce this acquisition of high quality, mid-vol metallurgical coal assets in Virginia that will enable the coal miners in the area to return to work. We have begun the process of hiring key personnel for these operations as we look to return these mines to their full production capacity. We are also evaluating expanding production with these assets based on market demand for this high quality mid-vol coal. We have already met with the primary existing customer for this coal and they look forward to these mines resuming production as we believe this quality coal is key to the customer’s operations.
This acquisition provides Rhino with a high demand, mid-vol coal that we did not previously have in our portfolio of coal qualities. We believe market demand will be strong for this coal in future periods as this coal quality is not produced in large quantities in Central Appalachia.
Throughout this acquisition process, we were pleased with the continued support that our financing partner, Colbeck Capital Management, LLC (“Colbeck”), provided us, which is evidenced by Colbeck’s approval of a $5.0 million delayed draw per the terms of our current financing agreement to provide the funds needed to refurbish these operations. Colbeck's support during a time when other major coal producers have filed bankruptcy shows the strong relationship we have with our financing partner and their commitment to the Rhino organization.
This acquisition will provide many of the miners affected by this bankruptcy with the opportunity to return to work and we believe these assets will provide significant financial return that will provide long-lived value to Rhino’s unitholders.”
Rhino Resource Partners LP is a diversified energy limited partnership that is focused on coal and energy related assets and activities, including energy infrastructure investments. Rhino produces metallurgical and steam coal in a variety of basins throughout the United States.