Mr. Jason Walsh reports
THELON ENTERS LOI TO ACQUIRE PRIVATE PRODUCING COAL COMPANY
Thelon Capital Ltd. has entered into an option to purchase a100-per-cent interest in a private Tennessee mining company (Privateco).
The company is a 30-year-old privately held mining company currentlyproducing 50,000 tons of coal a month from three permitted mines, with afourth permit in place and planned to start producing shortly. Itcurrently is supplying local industrial and utility markets, with plansto take advantage of the growing United States export market. Thisacquisition gives Thelon Capital immediate production and is animportant step in Thelon achieving its goal of becoming a million-tonannual producer of high-quality compliant coals.
Acquisition highlights:
- 30 years experience in Appalachian coal production and sales;
- Highly respected in coal mining and reclamation;
- Produces and sells currently to local utility and industry;
- Producing 50,000 tons per month from three permitted strip and auger mines with four additional mines planned;
- Has over 22 million tons of recoverable coal, including 4.5 million tons of Blue Gem seam metallurgical coal, under permit or lease;
- Employs over 100 people locally;
- Has an estimated $24-million (U.S.) in operating mining equipment, wash plant and support infrastructure;
- No debt and cash flow positive for last three fiscal years;
- Current management stays in place.
The option allows for Thelon to purchase 100 per cent of the outstandingshares of the company for $35-million (U.S.) and pay $7-million dollarsfor $7-million in surety bonds. Thelon must pay $1-million 14 days fromsigning and $41-million in 120 days. Thelon may get a 60-day extensionby adding $500,000 to the deposit.
Timothy Webb, PE, a qualified person under National Instrument 43-101,has approved the technical information contained in this release.
The LOI is subject to certain conditions including due diligence byThelon, acceptance of the transaction by the TSX Venture Exchange andother conditions customary for transactions similar in nature to thetransaction
SUCYN