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Paringa signs sales agreements for US mine

19th October 2015

By: Esmarie Iannucci

Creamer Media Senior Deputy Editor: Australasia

  

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PERTH (miningweekly.com) – Coal developer Paringa Resources has inked cornerstone coal sales agreements worth a combined $220-million over its Buck Creek No 1 mine, in the US.

The coal sales agreement with Louisville Gas and Electric Company and Kentucky Utilities Company, would see Paringa deliver 4.75-million tonnes of coal over a five-year period, with 750 000 t to be delivered in 2018, and one-million tonnes a year between 2019 and 2022.

The contracted fixed coal sales prices for Paringa’s 11 200 btu/lb coal spec began at $44.50/t in 2018 and escalated to $48.20/t by 2022.

“I am very excited that Paringa has executed its cornerstone coal sales agreement with Louisville Gas and Electric Company and Kentucky Utilities Company. The contract is the culmination of over a year of due diligence, negotiations, documentation and approvals on both sides,” said Paringa president and CEO David Gay.

Paringa is expected to start production at Buck Creek No 1 in 2018, with the project reaching its full production capacity of 3.8-million tonnes a year by 2020. The project would require an initial capital investment of $127-million to yield 3.8-million tonnes a year of saleable coal over a mine life of around 18 years.

Edited by Chanel de Bruyn
Creamer Media Online Managing Editor

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