Cloud Peak Sale Set to Close in October
A corporate change document filed with the Securities and Exchange Commission today outlines the terms of an asset purchase agreement between Cloud Peak Energy, Inc. and Navajo Transitional Energy Company, LLC (NTEC).
According to the agreement, NTEC has agreed to purchase substantially all of Cloud Peak’s assets, including Antelope, Cordero Rojo, and Spring Creek mines.
The deal includes $15.7 million in cash, a first lien promissory note in the amount of $40 million, as well as a quarterly $0.15-per-ton royalty payment for the next five years on every ton of coal sold at Antelope and Spring Creek and each ton over 10 million sold at Cordero Rojo.
The Navajo Nation company will also be assuming coal production related pre- and post-petition tax liabilities and royalty payments that are estimated to be around $93.92 million as of Sept. 30.
In a press release issued Aug. 19, NTEC announced the purchase of approximately 90,000 acres of land including surface and mineral rights.
“With this purchase, NTEC becomes the third largest coal producer in the United States,” NTEC CEO Clark Moseley said in the release. “This growth will allow NTEC to support the Navajo Nation and its members, as well as other local economies throughout the West. NTEC will continue its efforts to lead conscientious energy development while striving to balance job growth and protecting the environment for future generations.”
According to the statement, NTEC plans to focus the newly acquired operations on diligent mining and market fundamentals to achieve the same level of financial success it has accomplished at the Navajo Mine.
NTEC purchased the Navajo Mine just south of Farmington, New Mexico, in 2013. The company’s website states the mine has provided coal to the Four Corners Power Plant for 50 years.