Canyon Consolidated Resources, LLC to Acquire Bowie Resource Partners, LLC


Murray Energy Corporation Press Release

ST. CLAIRSVILLE, OhioOct. 31, 2017 /PRNewswire/ — Murray Energy Corporation (“Murray Energy”), Mr. John Siegel, the current Chairman of Bowie Resource Partners, LLC (“Bowie”), Javelin Global Commodities (UK) LTD (“Javelin”), and Grupo CLISA, S. de R.L. de C.V. (“CLISA”) (collectively the “CCR Investors”) hereby announce that they have agreed to form a strategic partnership called Canyon Consolidated Resources, LLC (“CCR”). In founding CCR, the CCR Investors will combine: 1.) the assets of Bowie; 2.) the marketing, logistics and business development platform developed by Mr. Siegel and the current Bowie executives; 3.) Murray Energy’s management and operational expertise and coal from UtahAmerican Energy, Inc.’s Lila Canyon Mine, which is ultimately owned by Murray Energy; and 4.) Javelin’s and CLISA’s coal marketing expertise; to create the premier producer and marketer of bituminous coal in the Western United States.

CCR will be the largest bituminous coal producer in the Western United States, producing and marketing approximately 13 million tons of coal per year in both domestic and export markets. CCR will own approximately 214.8 million tons of coal reserves, and will operate three underground coal mines in Utah, specifically the: Sufco Mine; Skyline Mine; and Dugout Canyon Mine. Additionally, Murray Energy will sell one hundred percent (100%) of the coal produced at its Lila Canyon Mine to CCR, and will work with CCR employees to oversee the day-to-day mining operations of CCR, via a Services Agreement. The Lila Canyon Mine currently has approximately 42.3 million tons of coal reserves. 

CCR’s ownership is roughly summarized as follows: 30.5% by Murray Energy; 30.5% by entities owned or controlled by Mr. Siegel; 28.5% by second lien lenders, via warrants; 7.25% by Javelin, a leading marketing and trading firm of thermal coal and other commodities; and 2.25% by CLISA, a trading and investment group based in Mexico with a focus on the energy industry.

The CCR Investors expect to finance a portion of the partnership, and pay related fees and expenses, with the proceeds of debt financing. A portion of these proceeds will be used to recapitalize Bowie’s existing capital structure.  Jefferies is acting as Sole Financial Advisor on the transaction.

“We are extremely pleased to form this strategic partnership that is CCR, with Mr. John Siegel, and our other partners,” stated Mr. Robert E. Murray, Chairman, President, and Chief Executive Officer of Murray Energy.

Mr. Murray continued, stating, “We are very familiar with Bowie’s coal mines and with coal markets both domestically and internationally.  We believe that this partnership will generate tremendous cost synergies, which will allow these mines to be extremely competitive in the domestic and international coal marketplace.”

Mr. Robert D. Moore, Executive Vice President, Chief Operating Officer, and Chief Financial Officer of Murray Energy stated that “Clearly, the United States coal industry has experienced tremendous transformation over the past several years. We have long maintained that our industry must undergo significant consolidation in order to survive in what have been extraordinarily depressed coal markets. This CCR partnership will provide this necessary consolidation, which will substantially benefit all interested parties.”

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