Coal Age

MAR 2018

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4 March 2018 news Warrior Met Coal Prepares for 2018 b r e a k i n g n e w s Corsa Sells Thermal Coal Assets Corsa Coal Corp. has decided to sell its Central Appalachia (CAPP) thermal and industrial coal division to Industrial Minerals Group, a buyer group led by that division's current management team. The CAPP division's operations include one underground mine, Cooper Ridge, and two surface operations, the Valley Creek and Buffalo Creek mines. "The sale of our CAPP division will allow us to dedicate all of our corporate resources to the metallurgical coal market where we believe we can achieve the highest rates of return on investment," said George Dethlefsen, CEO, Corsa Coal. "Corsa's focus going forward is to ag- gressively increase its metallurgical coal production, maximize value added services activity, and continue to grow our metallurgical sales and trading platform." Industrial Minerals Group will assume a certain amount of debt, leases and future costs, including end of mine closure costs, estimated in the aggregate by Corsa to be approximately $8 million. Last year, the CAPP division generated revenues of $46.4 million and had $20.2 million of negative EBITDA, including a $20 million asset impairment. It sold 539,000 tons of thermal coal and 135,000 tons of high vol met- allurgical coal. Corsa is essentially selling its Kopper Glo Mining subsidiary to In- dustrial Minerals Group and the transaction is expected to be complet- ed by March 9. The principals for the Industrial Minerals Group include Hunter Hobson, the president of the CAPP division, and Keith Dyke, former president of the CAPP division, and they received financing from en- tities controlled by a member of the Robertson family, who controls the general partner of Quintana Energy Partners. Quintana currently controls approximately 41% of Corsa's shares. Warrior Met Coal, the leading U.S. exporter for high-quality met- allurgical coal, confirmed it has completed three planned long- wall moves. It plans to ramp up production in Alabama to meet a tight market for the high-quality premium met coal market. Pric- es for seaborne met coal are expected to climb higher in the first quarter of 2018, reflecting resilience in global steel production, as well as the effects of met coal supply disruptions in Australia and supply side reforms in China. "Warrior's results in the fourth quarter were even better than expected enabling us to exceed our full-year guidance in our key sales and production metrics," said Walt Scheller, CEO of Warrior. "The fourth quarter also saw the timely and successful back-to- back completion of all three longwall moves which will help to strengthen our operational base in 2018." Warrior produced 1.6 million tons of met coal in the fourth quarter of 2017, 52% more than the amount produced in the fourth quarter of 2016. For 2017, the company produced 6.7 mil- lion tons, which exceeded its guidance and expectations as it ramped up its operations toward full capacity of the mines. "Moving one longwall is challenging by itself and when com- bined with the normal difficult geological conditions near the end of a panel, three moves back-to-back could have been overwhelming," Scheller said. "However, our success was the result of good planning, preparation, communication and outstanding work by our employ- ees, and we thank them for the significant effort and success." Warrior's total mining revenues for the fourth quarter of 2017 were $228.8 million, which consisted of met coal sales of 1.4 mil- lion tons at an average net selling price of $168.89/ton, net of de- murrage and other charges. Sales volume increased 42% over the fourth quarter of 2016, reflecting both strong continued produc- tion and strong demand from customers. Warrior capitalized on the strong pricing environment in the quarter by selling its met coal at 101% of the quarterly Australian premium low-volatility hard coking coal index average price. Total revenues for 2017 were $1.2 billion on sales volume of 6.5 million tons. MEC Will Operate 3 Former Armstrong Mines Murray Energy Corp., which wrapped up the purchase of bankrupt Armstrong Energy Inc. in late February, plans to continue operating at least three former Armstrong Coal mines in western Kentucky that collectively produced nearly 4.5 million tons of steam coal in 2017. The Kronos and Survant underground mines in Ohio and Muhlenberg counties, respectively, and the Lewis Creek surface mine in Ohio County were major producers for St. Louis-based Armstrong, which filed for Chapter 11 bankruptcy reorganization on November 1, 2017, in the U.S. Bankruptcy Court for the East- ern District of Missouri in St. Louis. Judge Kathy Surratt-States approved Armstrong's revised bankruptcy reorganization plan that included the sale to Murray on February 2. Kronos produced 2.3 million tons last year, with Survant turn- ing out 1.25 million tons and Lewis Creek, 804,122 tons. Alabama's Warrior Met coal completes three longwall moves.

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