Cliffs Natural Resources Inc. Enters into a Definitive Agreement to Sell its Logan County Coal to Coronado Coal II LLC.
CLEVELAND, Dec. 3, 2014 /PRNewswire/ -- Cliffs Natural Resources Inc. (NYSE: CLF) announced today that it has entered into a definitive agreement to sell its Logan County Coal assets in southern West Virginia to Coronado Coal II LLC for US$175 million in cash and the assumption of certain liabilities. Cliffs anticipates using the cash proceeds from the sale for debt repayment.
Lourenco Goncalves, Cliffs' Chairman, President and Chief Executive Officer said, "I am very pleased to be able to sell these assets to Coronado Coal, an experienced West Virginia-based coal operator. This transaction is another important step in executing our strategy to transform Cliffs into a stronger, pure-play U.S. iron ore supplier."
Additionally, the transaction will provide employment opportunities for many of the current Logan County Coal employees to become part of the Coronado Coal team. Cliffs other U.S. coal assets, Oak Grove mine in Alabama and Pinnacle mine in West Virginia, are unaffected by this transaction. The Company stated that it will continue to explore sale options for its other coal assets.
Completion of the sale to Coronado Coal II LLC is subject to a number of conditions including customary regulatory approvals. The parties expect to close the transaction by year-end 2014 and Cliffs expects to record a loss on the sale of assets in the range of approximately $375 million to $425 million on a pre-tax basis in the fourth quarter of 2014.
Deutsche Bank Securities Inc. acted as financial advisor and Hahn Loeser & Parks LLP acted as legal advisor to Cliffs Natural Resources Inc.
About Cliffs Natural Resources Inc.
Cliffs Natural Resources Inc. is a leading mining and natural resources company. The Company is a major iron ore producer in the Great Lakes region and a significant producer of high-and low-volatile metallurgical coal in the U.S. Additionally, Cliffs owns iron ore mines in Eastern Canada and operates an iron mining complex in Western Australia. Driven by the core values of social, environmental and capital stewardship, Cliffs' employees endeavor to provide all stakeholders operating and financial transparency. News releases and other information on the Company are available at: http://www.cliffsnaturalresources.com.
About Coronado Coal LLC
Coronado Coal LLC (Coronado) was formed August of 2011 to acquire, develop, and operate coal assets throughout the world. The company is headquartered in Wilton, Connecticut, USA.
This release contains forward-looking statements within the meaning of the federal securities laws. Although the Company believes that its forward-looking statements are based on reasonable assumptions, such statements are subject to risks and uncertainties relating to Cliffs' operations and business environment that are difficult to predict and may be beyond Cliffs' control. Such uncertainties and factors may cause actual results to differ materially from those expressed or implied by forward-looking statements for a variety of reasons including without limitation: our ability to successfully complete the sale of our Logan County Coal asset, including being able to satisfy applicable closing conditions; our ability to successfully execute an exit option for Bloom Lake mine that minimizes the cash outflows and associated liabilities of our Canadian operations; trends affecting our financial condition, results of operations or future prospects, particularly the continued volatility of iron ore and coal prices; our actual levels of capital spending; uncertainty or weaknesses in global economic conditions, including downward pressure on prices, reduced market demand and any slowing of the economic growth rate in China; our ability to successfully identify and consummate any strategic investments and complete planned divestitures; the outcome of any contractual disputes with our customers, joint venture partners or significant energy, material or service providers or any other litigation or arbitration; the ability of our customers and joint venture partners to meet their obligations to us on a timely basis or at all; our ability to reach agreement with our iron ore customers regarding any modifications to sales contract provisions; the impact of price-adjustment factors on our sales contracts; changes in sales volume or mix; our actual economic iron ore and coal reserves or reductions in current mineral estimates, including whether any mineralized material qualifies as a reserve; the impact of our customers using other methods to produce steel or reducing their steel production; events or circumstances that could impair or adversely impact the viability of a mine and the carrying value of associated assets; the results of prefeasibility and feasibility studies in relation to projects; impacts of existing and increasing governmental regulation and related costs and liabilities, including failure to receive or maintain required operating and environmental permits, approvals, modifications or other authorization of, or from, any governmental or regulatory entity and costs related to implementing improvements to ensure compliance with regulatory changes; our ability to cost-effectively achieve planned production rates or levels; uncertainties associated with natural disasters, weather conditions, unanticipated geological conditions, supply or price of energy, equipment failures and other unexpected events; adverse changes in currency values, currency exchange rates, interest rates and tax laws; availability of capital and our ability to maintain adequate liquidity and successfully implement our financing plans including our ability to successfully replace our existing revolving credit facility and issue new senior secured debt; our ability to maintain appropriate relations with unions and employees and enter into or renew collective bargaining agreements on satisfactory terms; risks related to international operations; availability of capital equipment and component parts; the potential existence of significant deficiencies or material weakness in our internal control over financial reporting; problems or uncertainties with productivity, tons mined, transportation, mine-closure obligations, environmental liabilities, employee-benefit costs and other risks of the mining industry; and other factors and risks that are set forth in the Company's most recently filed reports with the U.S. Securities and Exchange Commission (the "SEC"). The information contained herein speaks as of the date of this release and may be superseded by subsequent events. Except as may be required by applicable securities laws, we do not undertake any obligation to revise or update any forward-looking statements contained in this release.
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SOURCE Cliffs Natural Resources Inc.
Released December 3, 2014