Allegiance to acquire Drummond's Short Creek coal mine in Alabama for US$15.9M

ASX-listed Allegiance Coal Ltd. inked an agreement with Drummond Coal Inc. to acquire the Short Creek coal mine in Alabama for US$15.9 million.

The total value is broken down to US$4.4 million in cash to Drummond and related entities for the land and assets, and US$11.5 million to replace the reclamation bond with the state that follows the land and assets.

The transaction will close upon the delivery of Marshall Miller & Associates Inc. of a resource statement and upon completion of the transfer of land and fixed assets, existing permits and the coal lease to the Mary Lee, Blue Creek and Newcastle coal seams.

Allegiance raised A$30 million through a placement, which will be used for the acquisition, to advance the mine into development, and for working capital.

In July, Allegiance's subsidiary Allegiance Coal USA Ltd. unconditionally agreed to acquire Black Warrior Minerals Inc., which holds rights in the BWM coal mine in Alabama, for US$9.3 million.