David Wiley, president and CEO of Phoenix Coal, said: “Closing the transaction achieves critical objectives for both companies. For Oxford, the Muhlenberg County surface mining business will bring diversification to an already strong foundation of assets and people in Ohio.
“Most importantly, Phoenix is now in an outstanding position to execute on its primary objective, which is to maximize the value of the Gryphon Mining Complex. We continue to advance the development of this project, respond to solicitations and inquiries from potential customers, and secure additional property control while we evaluate all of our strategic options, including alternatives to monetize or joint venture the asset.”
Phoenix Coal said that after eliminating its long-term debt and strengthening its cash position from the Oxford transaction, it can now capitalize on Gryphon mining project and potential opportunities in the market.
After the sale of its surface mining operations, as of September 30, 2009, Phoenix will have a cash balance of approximately $22.4m. An additional $3.3m that has been escrowed due to certain provisions in the transaction agreement is scheduled to be released over the next 18 months.
Charles Ungurean, president and CEO of Oxford Mining – Kentucky, said: “We are very excited about the acquisition of Phoenix’ surface mining business. This transaction provides us an entry into Kentucky and the Illinois Basin and will significantly increase Oxford’s scale, both from a coal reserve life and volume capacity standpoint.”
