America West Resources Signs Letter of Intent to Acquire a Chinese Coal Coking Plant
02 Diciembre 2009 - 7:30AM
PR Newswire (US)
SALT LAKE CITY, Dec. 2 /PRNewswire-FirstCall/ -- America West
Resources, Inc. (OTC:AWSR) (BULLETIN BOARD: AWSR) , a domestic
compliant coal producer with mining operations in Central Utah,
today announced that it has signed a binding Letter of Intent to
acquire the coking coal operations (Luxin) of Shanxi Jiexiu Luxin
Coal Gasification Company (Shanxi Jiexiu), an established
diversified holdings company based in Shanxi Province, China, which
also owns coal mines and a major coal trading operation. Luxin,
(pronounced Loo-chin), operates a state-of-the-art coking coal
plant in Shanxi Province with annual production capacity of 600,000
metric tons. Built in 2005 to the highest modern environmental
standards, the plant utilizes technology that in addition to
producing coke, generates electricity using synthetic gas produced
through coal gasification. In the U.S., coal gasification, which
also makes post-combustion carbon capture easier, is a significant
area of current energy research that has benefited from the $3.4
billion in federal stimulus funds marked for fossil fuels research.
In 2007, Luxin revenues totaled US$129 million and EBITDA was US$30
million. In 2008, the Company achieved annual revenues of US$140
million and EBITDA of US$22 million. For the first six months of
2009, Luxin posted revenues of US$60 million and EBITDA of US$9
million. (Please note that all of the aforementioned financial data
is subject to formal audit prior to the closing of the
transaction.) According to a Reuter's news report published
yesterday, demand from steelmakers for metallurgical, or coking
coal, is rebounding from last year's recession, especially in
China. The article cites industry authorities who project that
Asian consumption will increase to eight billion tons from six
billion tons in the next 20 years. Dan Baker, Chief Executive
Officer of America West Resources, stated, "Through the acquisition
of the majority interest in Luxin and the vertical integration of
its coking coal plant into our operating platform, America West
effectively diversifies our business, establishes a critical
gateway to China, and materially strengthens our financial profile.
As such, we believe we are much better positioned to pursue a
listing on a national exchange on an accelerated timetable.
Moreover, because this acquisition is ideally aligned with our
Company's long term met coal export strategy, America West looks
forward to optimizing our met coal assets while further
strengthening 'westward' coal export to Asia through U.S. west
coast channels." The transaction will be structured as a 30-year
Contractual Joint Venture (CJV), an approved form of foreign
investment in China. The terms of the proposed transaction provide
for America West to acquire a 70% equity interest in an offshore
company, which will hold an 80% interest in the CJV, for a total
combined stock and cash deal valued at $40 million. Shanxi Jiexiu's
current management will retain the remaining 30%. In addition to
the stock issued in the transaction, America West will contribute
$30 million in working and expansion capital to the CJV in tandem
with the closing of the transaction, while Shanxi Jiexiu will
contribute the coking plant assets. Furthermore, the CJV will have
contractual rights to metallurgical coal production from Shanxi
Jiexiu's coal mining subsidiary to ensure a steady low-cost raw
materials supply. The coal mining subsidiary is actively engaged in
mining metallurgical coal deposits in the prolific coal producing
region of Shanxi Province; reserves are estimated at over 100
million tons. Following the closing of the transaction, Shanxi
Jiexiu will manage the day-to-day operations at the Luxin plant
with oversight from America West Resources. In addition to
conducting full due diligence and signing definitive CJV documents,
the successful completion of the transaction is subject to America
West raising required working and expansion capital for the CJV, as
noted above. Notwithstanding any unforeseen delays or difficulty in
securing equity financing, the transaction is anticipated to close
in the first quarter of 2010. About America West Resources, Inc.
Headquartered in Salt Lake City, Utah, America West Resources is an
established domestic coal producer focused on the mining of
compliant (low-sulfur) coal and its sale primarily to U.S. utility
companies for use in generating electricity. The Company operates
the Horizon Mine, which has recoverable compliant coal reserves
under lease of approximately 19 million tons. For more information,
please visit http://www.americacoal.com/. Forward-Looking
Statements This news release contains forward-looking statements
Please refer to the Company's Form 10-K and other filings with the
United States Securities and Exchange Commission (the "SEC") for
additional information regarding risks and uncertainties,
including, but not limited to, the risk factors listed from time to
time in such SEC reports. Copies of these filings are available
through the SEC's electronic data gathering analysis and retrieval
system (EDGAR) at http://www.sec.gov/. The forward-looking
statements in this release do not constitute guarantees of future
performance. Investors are cautioned that statements in this press
release which are not strictly historical statements, including,
without limitation, statements regarding current or future mining
output, ability to obtain necessary equipment, personnel and
permits to mine coal, production capabilities, management's
strategy, plans and objectives for future operations, plans and
objectives for production, plans and objectives for present and
future production, plans and objectives for regulatory approval,
and anticipated results, constitute forward-looking statements.
Such forward-looking statements are subject to a number of risks
and uncertainties that could cause actual results to differ
materially from those anticipated, including, without limitation,
risks associated with coal production, mining in general and in our
mines in particular, ability to achieve the coal output
anticipated, ability to obtain permits, ability to hire and retain
the necessary personnel, as well as other risks detailed in our
filings with the SEC. We assume no obligation to update any
forward-looking information contained in this press release or with
respect to the announcements described herein. FOR ADDITIONAL
INFORMATION, PLEASE CONTACT: ELITE FINANCIAL COMMUNICATIONS GROUP
Dodi B. Handy, President & CEO (Twitter: dodihandy) For Media
Inquiries: Kathy Addison, VP, Elite Media Group (Twitter:
kathyaddison) 407-585-1080 or via email at DATASOURCE: America West
Resources, Inc. CONTACT: Elite Financial Communications Group, Dodi
B. Handy, President & CEO (Twitter: dodihandy), For Media
Inquiries: Kathy Addison, VP, Elite Media Group (Twitter:
kathyaddison), +1-407-585-1080, Web Site:
http://www.americacoal.com/
Copyright