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Gold/Mining/Energy : Coal -- Ignore unavailable to you. Want to Upgrade?

To: Dennis Roth who wrote (254)	4/7/2006 8:17:59 AM
From: Dennis Roth	Respond to of 2031

Alpha Natural Resources to Acquire Mining Operations, 73 Million Tons of Coal Reserves from Progress Fuels prnewswire.com ABINGDON, Va., April 6 /PRNewswire-FirstCall/ -- Alpha Natural Resources, Inc. (NYSE: ANR), a leading Appalachian coal producer, announced that is has agreed to acquire certain coal mining operations in eastern Kentucky from Progress Fuels Corp., a subsidiary of Raleigh, North Carolina-based Progress Energy (NYSE: PGN). Alpha will acquire the stock of Diamond May Coal Co. and Progress Land Corp. and the assets of Kentucky May Coal Co., Inc. from Progress Fuels. The operations to be acquired are adjacent to Alpha's Enterprise business unit and will be integrated with Enterprise. Alpha will pay approximately $23 million plus an adjustment for working capital at closing, and will assume $8 million in reclamation liabilities. Alpha plans to use its existing revolving credit facility to finance the transaction. Diamond May operates two surface and two underground mines in Kentucky, employing 380 union-free employees. Production in 2005 was approximately three million tons of steam coal. Diamond May controls an estimated 55.5 million tons of proven and probable surface and underground reserves, including the undeveloped Elkhorn 2 block of more than 35 million tons. Diamond May also operates a 700 ton-per-hour preparation plant and loadout facility on the CSX railroad. Kentucky May Coal Co. owns an estimated 17.8 million tons of proven and probable underground reserves, most of which are high in Btu content and low in sulfur. It has no current active mines. "This acquisition will more than double our reserve base in eastern Kentucky," said Michael J. Quillen, Alpha's president and CEO. "What we learned from acquiring and quickly integrating the Callaway coal operations last October will help us with Progress. Like Callaway, these are the type of operations that meet our acquisition criteria, and they should benefit from being managed by one of our best business units, Enterprise." Over the next two years Alpha plans to develop a slope and shaft into the underground Elkhorn 2 reserve, with first production expected from the mine in 2008. From a rail transportation standpoint, Elkhorn 2 is advantageously positioned with the growing utility scrubber market in the Southeast. Closing is anticipated by May 1, 2006 and is subject to customary closing conditions. About Alpha Natural Resources Alpha Natural Resources is a leading producer of high-quality Appalachian coal. Approximately 92 percent of the company's reserve base is high Btu coal and 89 percent is low sulfur, qualities that are in high demand among electric utilities which use steam coal. Alpha is also one of the nation's largest producers and exporters of metallurgical coal, a key ingredient in steel manufacturing. Alpha and its subsidiaries currently operate mining complexes in four states, consisting of 69 mines feeding 11 coal preparation and blending plants. The company and its subsidiaries employ more than 3,300 people. [ snip ]