The coal lease grants Arch the right to mine approximately 9,600 acres of GNP-owned minerals that encompass approximately 731 million tons of high-quality sub-bituminous reserves.
Corbin Robertson Jr, chairman and CEO of Natural Resource Partners, said: “The leasing of this large tract of reserves by Great Northern Properties will present NRP a significant growth opportunity within the next ten years.
“At the time of the formation of the Natural Resource Partners, we put an agreement in place that would grant NRP the opportunity to acquire up to 20 billion tons of coal reserves. In 2007, NRP was able to purchase the Mettiki reserves in Northern West Virginia from Western Pocahontas Properties, another original sponsor, under the same agreement, and the coal lease between Great Northern and Arch puts another large block of reserves in line for a similar acquisition.”
These reserves are a portion of approximately 20 billion tons of coal reserves owned by Great Northern Properties in Montana and North Dakota. The reserves are subject to an agreement between GNP and NRP that states that the reserves must be offered to NRP at the time that the reserves exceed a value of $10m.
Due to the long time frame for the reserves to be developed, anticipated being between five and ten years, Natural Resource Partners has decided that it is in its interest to temporarily waive its rights under that agreement. The waiver agreement will defer the offering of these reserves to NRP until such time as the operations on these reserves reach a considerable production level. The agreement was reviewed and approved by the Conflicts Committee of NRP’s board of directors.
