Lease of non-core, idled mine to a third party will generate income and further reduce cost structure and support environmental efforts
Well-positioned to be a long-term supplier of raw material to the global infrastructure market while bringing a more efficient and modernized business model to the industry
FISHERS, IN / ACCESSWIRE / July 30, 2020 / American Resources Corporation (NASDAQ:AREC) ("American Resources" or the "Company"), a supplier of raw materials to the rapidly growing global infrastructure marketplace, today announced that the Company has entered into a lease of one of its non-core mines to a third-party operator. The lease agreement demonstrates the Company's ability to monetize certain non-essential assets to generate income and further reduce its cost structure.
The mine is a high-BTU, premium, underground thermal coal mine located in Perry County, Kentucky, that was included as part of the Company's acquisition of Knott County Coal from Arch Coal (now Arch Resources) in April 2016. Given American Resources focus on the steel and infrastructure markets, the mine does not fit into the Company's core operating plans. Under the terms of the lease, American Resources will receive a royalty on the number of tons produced from the mine, in addition to the establishment of an environmental reclamation fund royalty that will be used to remediate and restore the land once the mine is permanently closed.
Mark Jensen, Chairman and CEO of American Resources Corporation commented, "We are very pleased to have entered into this lease with a well-established, high-quality operator that desires to create jobs in Eastern Kentucky. This was not a mine that we had in our future mining plans and the agreement provided us a way to create low-risk, low-cost cash flow for our Company. While our focus is on bringing the Company's core assets back into production as the market recovers, we will always entertain out-of-the-box solutions to maximize cash flow, given we are one of the largest owners of mining infrastructure in eastern Kentucky. We believe this lease further enhances the flexibility of our focused supply base in anticipation of worldwide infrastructure related demand, as well as creating more efficiencies with our environmental reclamation efforts."
American Resources has been a consolidator and operator of quality metallurgical carbon assets in the Central Appalachian basin ("CAPP") to serve customers in the steelmaking, specialty alloy metals, and industrial marketplaces. Its next-generation model and philosophy is to restructure existing, legacy operations to better fit the modern-day marketplace by eliminating legacy costs and liabilities to significantly increase the overall efficiency and profitability of its complexes. Additionally, its recently launched American Metals subsidiary is focused on aggregating and processing used steel to be recycled and sold to traditional and electric arc furnace steel production facilities. American Metals uses resources already owned by the Company to diversify its products being supplied to the infrastructure and metals markets.
About American Resources Corporation
American Resources Corporation is a supplier of high-quality raw materials to the rapidly growing global infrastructure market. The Company is focused on the extraction and processing of metallurgical carbon, an essential ingredient used in steelmaking. American Resources has a growing portfolio of operations located in the Central Appalachian basin of eastern Kentucky and southern West Virginia where premium quality metallurgical carbon deposits are concentrated.
American Resources has established a nimble, low-cost business model centered on growth, which provides a significant opportunity to scale its portfolio of assets to meet the growing global infrastructure market while also continuing to acquire operations and significantly reduce their legacy industry risks. Its streamlined and efficient operations are able to maximize margins while reducing costs. For more information visit americanresourcescorp.com or connect with the Company on Facebook, Twitter, and LinkedIn.
Special Note Regarding Forward-Looking Statements
This press release contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements involve known and unknown risks, uncertainties, and other important factors that could cause the Company's actual results, performance, or achievements or industry results to differ materially from any future results, performance, or achievements expressed or implied by these forward-looking statements. These statements are subject to a number of risks and uncertainties, many of which are beyond American Resources Corporation's control. The words "believes", "may", "will", "should", "would", "could", "continue", "seeks", "anticipates", "plans", "expects", "intends", "estimates", or similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain such identifying words. Any forward-looking statements included in this press release are made only as of the date of this release. The Company does not undertake any obligation to update or supplement any forward-looking statements to reflect subsequent events or circumstances. The Company cannot assure you that the projected results or events will be achieved.
PR Contact:
Precision Public Relations
Matt Sheldon
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Investor Contact:
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Jenene Thomas
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Company Contact:
Mark LaVerghetta
317-855-9926 ext. 0
Vice President of Corporate Finance and Communications
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SOURCE: American Resources Corporation