The five-year base agreement, valued at approximately $40M in base tons and up to an additional $27m in optional tons, provides for America West to supply compliant thermal coal mined from its Horizon operations and delivered pursuant to a predetermined monthly shipping schedule beginning in 2011 and continuing through the end of 2015.
However, among other terms and conditions, the major electric power company will have the option to extend the agreement up to seven additional years, thereby increasing the total potential value of the deal to a total of up to $175m.
America West Resources CEO Dan Baker said that with this agreement now in hand, the company has secured sales of up to $400m for delivery of its compliant coal over the next five years, and total potential sales of almost $500m over the next decade.
