Dec 31 2015
Rhino Resource Partners LP announced today that it has completed the sale of its Central Appalachia Deane mining complex to Quest Energy Inc.. The Partnership’s Deane mining complex is located in eastern Kentucky and includes one underground mine and related infrastructure that consists of a preparation plant and a unit train loadout facility.
The sale of the Deane complex transfers the underground mine, related equipment, the preparation plant and loadout facility, while the Partnership retains the mineral rights for the 39.3 million tons of proven and probable steam coal reserves at this complex. The completed transaction also includes a royalty agreement with Quest Energy pursuant to which the Partnership will collect future royalties for coal mined and sold from the Deane complex. The sale of the Deane complex also relieves the Partnership of significant reclamation liabilities and bonding requirements.
Joe Funk, President and Chief Executive Officer of Rhino’s general partner, stated, “The sale of the Deane mining complex is a significant step in our strategy to convert idle, non-core mining operations with high carrying costs to cash generating royalty assets. The Deane mining complex sale demonstrates our strategy to retain the mineral ownership or mineral rights to properties that transforms these assets to generate future royalty income streams. Our strategy with the Deane mining complex sale reduces our operational risk, reclamation liabilities and bonding requirements, while converting an idle, high carrying cost property to a royalty-generating asset that will provide stable, long-term cash flows to us. We are excited about our relationship with Quest Energy and look forward to the long-term business opportunity with a significant lessee partner.”
Mark Jensen, Chief Executive Officer of Quest Energy commented, “Completing the acquisition of the Deane mining complex and leasing the surrounding coal from Rhino’s Elk Horn subsidiary compliments our current operational and reserve footprint in the region and allows us to expand our production and processing capabilities. We are excited about the potential for new, additional reserves to be mined and processed through the Deane mining complex and loadout.”
Source: http://www.rhinolp.com/