American Resources Corporation Completes Sale of Non-Core Mines and Reduction of Company Liabilities
March 6, 2020 - American Resources Corporation (NASDAQ:AREC) ("American Resources" or the "Company"), a supplier of raw materials to the rapidly growing global infrastructure marketplace with a primary focus on the extraction, processing, transportation and distribution of metallurgical carbon to the steel and specialty metals industries, has closed on the previously announced sale of three idled permits associated with one underground mine and one surface mine located in Perry County, Kentucky near the town on Hazard.
The permit sale has been part of the post-acquisition restructuring efforts American Resources has undertaken to eliminate legacy costs and liabilities at Perry County Resources ("PCR"), a subsidiary of American Resources, and to reduce the overall operating costs at the complex. Total consideration for the assets being sold is approximately $1,000,000 of cash and equipment.
"The sale of these non-core permits is a important step in our Perry County restructuring project to reduce overall operating expenses and to establish PCR as a one-mine, one-plant facility. It also demonstrated the Company's ability to turnaround a complex that was losing approximately $35 million a year into a profitable enterprise," commented Mark Jensen, Chairman and CEO of American Resources Corporation. "Looking to the future, we are now well positioned with PCR to focus on operational excellence to produce high-quality metallurgical carbon to supply the rapidly growing infrastructure market and to build a long-term sustainable business."
Through the divestiture of the three non-core permits, American Resources has estimated that it has reduced the overall holding cost at Perry County Resources by over $9.0 million per year (including prior leases), while also shedding over $3 million or 31% of its associated environmental reclamation liabilities at PCR. Additionally, and as part of its restructuring efforts and its previously announced Mine Consolidation Project, American Resources is repositioning equipment from the sold assets into its retained operations at PCR allowing the Company to convert the operating sections and mine plan to support similar output under a much more efficient, lower cost structure. The Company looks forward to providing more detail on its revised mine plan in the near future.
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. The Company is committed to being one of the lowest cost operators in the Central Appalachian basin (CAPP) and throughout all its carbon mining, processing, and transportation operations.