American Resources lays out plans for coming year

In a letter to its shareholders, growing US coal miner American Resources not only outlined the achievements it has made in the last year, but also what’s to come for its portfolio
American Resources lays out plans for coming year American Resources lays out plans for coming year American Resources lays out plans for coming year American Resources lays out plans for coming year American Resources lays out plans for coming year

American Resources has brought five new mines into production and purchased one more in the last year

Staff Reporter

In his review of last year's highlights, CEO Mark Jensen said the Indiana-based company, which has placed its main focus on the Appalachian region, brought five new mines into production and purchased an additional one.

It now has a mix of metallurgical, thermal and specialty coal production, with met coal accounting for about 70% of its revenue. That is expected to continue, he said.

In the coming year, it has significant plans for several of its operations, including McCoy Elkhorn, where its expansion work will continue for the complex's Mine 15 and Carnegie 1 operations.

"We continue to perform face-up work on our second underground mine in the Lower Alma coal seam called Carnegie 2 and anticipate production to start at the end of 2018 or early 2019," he said, adding that, at that point, face-up work will begin on American's third permitted underground mine in the Lower Alma seam, Carnegie 3.

At the sister PointRock surface mine, it is also expecting production later this year, and it has plans to work on the permitting for an underground operation in the Upper Alma seam.

At the Deane Mining complex, Jensen said its crews have made major strides to increase production at all of the properties. At the Access Energy mine, additional equipment was acquired to help it to significantly increase production over the coming months, and at the newly commenced Razorblade surface mine it will continue over the coming months to ramp up output.

American is anticipating significant progress being made at the currently idled Love Branch underground mine to bring it online. Preliminary planning and development has already started on the permitted Access North project in the Elkhorn 2 seam.

The miner expects to be just as busy at the Knott County Coal complex; it is modifying the permits for the currently producing Wayland surface operation as well as Topper, which will mine from the Hazard 4 seam.

"With significant contour, area mining, auguring and highwall mining of the Hazard 4 throughout our reserve area in Knott county, we anticipate substantial long-term production potential out of our upcoming Topper surface mine," Jensen said.

Also at the Knott County complex, it is in the planning phase of its greenfield Bill D underground mine in the Elkhorn 3 seam, and also for the reopening of another Elkhorn 3 seam project, the idled Classic underground operation.

"Given its close proximity to our Supreme Energy coal preparation plant and Bates Branch rail loadout at Knott County Coal, we are evaluating the possibility of restarting those processing and rail loading operations should the coal volumes justify those operations," he noted.

Looking at the coming year from a mergers and acquisitions perspective, American is moving along there as well; in fact, it is looking over "several opportunities of a wide-ranging geographic footprint and operational size", but Jensen stressed that all will allow the company to remain true to its philosophy of remaining one of the region's lowest-cost and most efficient producers.

"While our ability to consummate these transactions depends on many factors, including successful negotiations and having additional capital to put towards development of these mines, we remain optimistic and confident that we will see some of these opportunities come to fruition in the future and become a significant contributor to our overall operations and profitability," he said. "We believe our acquisition pipeline will remain robust for many years to come."