Blackhawk Mining LLC is selling mineral reserves in northern West Virginia, consisting of about 20 million recoverable tons of coal, to Arch Coal Inc. for $52.5 million.
Blackhawk, which is in the process of a bankruptcy court restructuring, said Oct. 22 that it expects the deal to close in late November.
The Guffey Reserves in Taylor County, W.Va., are in the Lower Kittanning seam and are adjacent to existing Arch operations. Blackhawk is retaining about 50 million recoverable tons of reserves in the area for potential future divestment or development.
"Our strategy for success in volatile commodity markets requires low leverage and ample liquidity," Blackhawk CFO Jesse Parrish said in the statement. "We intend to use the proceeds from this transaction to assist in both objectives by paying down term loan debt and growing capacity under our revolving lines of credit."