Rhino Resource Partners LP Completes Sale of Central Appalachia Deane Mining Complex
Lexington, KY, Dec. 30, 2015 (GLOBE NEWSWIRE) -- Rhino Resource Partners LP (NYSE: RNO) (“Rhino” or the “Partnership”) announced today that it has completed the sale of its Central Appalachia Deane mining complex to Quest Energy Inc. (“Quest Energy”). The Partnership’s Deane mining complex is located in eastern Kentucky and includes one underground mine and related infrastructure that consists of a preparation plant and a unit train loadout facility. The sale of the Deane complex transfers the underground mine, related equipment, the preparation plant and loadout facility, while the Partnership retains the mineral rights for the 39.3 million tons of proven and probable steam coal reserves at this complex. The completed transaction also includes a royalty agreement with Quest Energy pursuant to which the Partnership will collect future royalties for coal mined and sold from the Deane complex. The sale of the Deane complex also relieves the Partnership of significant reclamation liabilities and bonding requirements.
Joe Funk, President and Chief Executive Officer of Rhino’s general partner, stated, “The sale of the Deane mining complex is a significant step in our strategy to convert idle, non-core mining operations with high carrying costs to cash generating royalty assets. The Deane mining complex sale demonstrates our strategy to retain the mineral ownership or mineral rights to properties that transforms these assets to generate future royalty income streams. Our strategy with the Deane mining complex sale reduces our operational risk, reclamation liabilities and bonding requirements, while converting an idle, high carrying cost property to a royalty-generating asset that will provide stable, long-term cash flows to us. We are excited about our relationship with Quest Energy and look forward to the long-term business opportunity with a significant lessee partner.”
Mark Jensen, Chief Executive Officer of Quest Energy commented, “Completing the acquisition of the Deane mining complex and leasing the surrounding coal from Rhino’s Elk Horn subsidiary compliments our current operational and reserve footprint in the region and allows us to expand our production and processing capabilities. We are excited about the potential for new, additional reserves to be mined and processed through the Deane mining complex and loadout.”
About Rhino Resource Partners LP
Rhino Resource Partners LP is a diversified energy limited partnership that is focused on coal and energy related assets and activities, including energy infrastructure investments. Rhino produces metallurgical and steam coal in a variety of basins throughout the United States and it leases coal through its Elk Horn subsidiary. Additional information regarding Rhino is available on its web site – RhinoLP.com.
About Quest Energy
Quest Energy Inc. is a diversified energy company focused on the extraction, processing, storage and distribution of energy sources and products. Quest Energy’s business model is built around niche, localized, and scalable low-cost operations, and is currently centralized on coal mining operations in the Appalachian and Illinois Basin regions of the United States. Quest Energy prides itself on utilizing the highest safety standards within its operations, while also attempting to minimize the impact on the environment during extraction and processing.
Forward Looking Statements
Except for historical information, statements made in this press release are “forward-looking statements.” All statements, other than statements of historical facts, included in this press release that address activities, events or developments that Rhino expects, believes or anticipates will or may occur in the future are forward-looking statements. These forward-looking statements are based on Rhino’s current expectations and beliefs concerning future developments and their potential effect on Rhino’s business, operating results, financial condition and similar matters. While management believes that these forward-looking statements are reasonable as and when made, there can be no assurance that future developments affecting Rhino will turn out as Rhino anticipates. Whether actual results and developments in the future will conform to expectations is subject to significant risks, uncertainties and assumptions, many of which are beyond Rhino’s control or ability to predict. Therefore, actual results and developments could materially differ from Rhino’s historical experience, present expectations and what is expressed, implied or forecast in these forward-looking statements. Important factors that could cause actual results to differ materially from those in the forward-looking statements include, but are not limited to, the following: Rhino’s inability to obtain additional financing necessary to fund its capital expenditures, meet working capital needs and maintain and grow its operations or its inability to obtain alternative financing upon the expiration of its credit facility; Rhino’s future levels of indebtedness, liquidity and compliance with debt covenants; sustained depressed levels of or decline in coal prices, which depend upon several factors such as the supply of domestic and foreign coal, the demand for domestic and foreign coal, governmental regulations, price and availability of alternative fuels for electricity generation and prevailing economic conditions; declines in demand for electricity and coal; current and future environmental laws and regulations, which could materially increase operating costs or limit Rhino’s ability to produce and sell coal; extensive government regulation of mine operations, especially with respect to mine safety and health, which imposes significant actual and potential costs; difficulties in obtaining and/or renewing permits necessary for operations; the availability and prices of competing electricity generation fuels; a variety of operating risks, such as unfavorable geologic conditions, adverse weather conditions and natural disasters, mining and processing equipment unavailability, failures and unexpected maintenance problems and accidents, including fire and explosions from methane; poor mining conditions resulting from the effects of prior mining; the availability and costs of key supplies and commodities such as steel, diesel fuel and explosives; fluctuations in transportation costs or disruptions in transportation services, which could increase competition or impair Rhino’s ability to supply coal; a shortage of skilled labor, increased labor costs or work stoppages; Rhino’s ability to secure or acquire new or replacement high-quality coal reserves that are economically recoverable; material inaccuracies in Rhino’s estimates of coal reserves and non-reserve coal deposits; existing and future laws and regulations regulating the emission of sulfur dioxide and other compounds, which could affect coal consumers and reduce demand for coal; federal and state laws restricting the emissions of greenhouse gases; Rhino’s ability to acquire or failure to maintain, obtain or renew surety bonds used to secure obligations to reclaim mined property; Rhino’s dependence on a few customers and its ability to find and retain customers under favorable supply contracts; changes in consumption patterns by utilities away from the use of coal, such as changes resulting from low natural gas prices; changes in governmental regulation of the electric utility industry; Rhino’s ability to successfully diversify its operations into other non-coal natural resources; disruption in supplies of coal produced by contractors operating Rhino’s mines; defects in title in properties that Rhino owns or losses of any of its leasehold interests; Rhino’s ability to retain and attract senior management and other key personnel; material inaccuracy of assumptions underlying reclamation and mine closure obligations; and weakness in global economic conditions.
Other factors that could cause Rhino’s actual results to differ from its projected results are described in its filings with the Securities and Exchange Commission, including its Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K.
Readers are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date hereof. Rhino undertakes no obligation to publicly update or revise any forward-looking statements after the date they are made, whether as a result of new information, future events or otherwise, unless required by law.
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