Bowie Resources acquires mines in Colorado and New Mexico

By By

Bowie Resource Partners,based in Louisville, Kentucky, entered into a definitive agreement to purchase the El Segundo and Lee Ranch mining complexes in New Mexico and the Twentymile mining complex in Colorado from Peabody Energy Corporation for $358 million in cash plus the assumption of certain liabilities, creating the largest bituminous coal producer in the western United States.
The acquisition will nearly double the size of BRP’s output to 25 million tons of ultra clean-burning Western Bituminous coal per year, generating top line revenues of $1 billion annually. The El Segundo and Twentymile mining complexes are located in northwestern New Mexico and northern Colorado, respectively. These two assets currently produce approximately 12 million tons of high BTU, low sulfur coal annually, with a reserve base of over 330 million tons. BRP will operate five mining complexes in Colorado, New Mexico and Utah, employing over 1,700 people and a current total reserve life of 20 plus years with the ability to greatly increase the reserve base.
“These acquisitions fit the vision and model that were the genesis of BRP, as we continue to buck the industry trend with long-term contractual partnerships with our customers and secure margins in our niche,” said John Siegel, Executive Chairman of BRP. “The El Segundo and Twentymile mining complexes have exemplary safety and productivity records, long-term relationships with domestic customers and superior reserve quality that combine to render this a very accretive and synergistic acquisition for us,” Siegel added.
“As was the case with our acquisition of Canyon Fuel in 2013, the addition of 700 men and women who share our commitment to safety, productivity, and the re-invigoration of our proud industry will result in a seamless workforce integration. We are proud and honored to expand our BRP family to include these wonderful men and women from El Segundo and Twentymile,” John Siegel said.
These mining complexes will build upon BRP’s strong, long-term contract portfolio in the Western Bituminous region. Production at these mines is fully committed for the next several years and, like BRP, also supported by other contracts that run into the next decade. After the transaction, the workforces of El Segundo and Twentymile are all expected to remain in place and become employees of BRP.
BRP
BRP currently has three underground coal mines in Utah’s Uinta Basin with a productive capacity of 12.6 million tons per year. The majority of BRP’s current coal sales are to domestic customers, pursuant to long-term, high volume coal supply agreements with fixed pricing.
As part of BRP’s domestic sales portfolio, BRP has multi-year coal supply agreements with PacifiCorp and Intermountain Power Agency, two investment-grade regional utilities that operate power plants located in close proximity to BRP’s mines. These multi-year supply agreements have minimum volume guarantees, with durations ranging from 2020 to 2029.
Transaction Details
The sale of El Segundo and Twentymile has been by approved by the Peabody Board of Directors and is expected to be completed in the first quarter of 2016. The transaction is subject to usual closing conditions and regulatory approvals.