Delaware | 1221 | 77-10695453 | ||
(State or Other Jurisdiction of | (Primary Standard Industrial | (I.R.S. Employer | ||
Incorporation or Organization) | Classification Code Number) | Identification Number) |
William N. Finnegan IV | G. Michael OLeary | |
Brett E. Braden | William J. Cooper | |
Latham & Watkins LLP | Andrews Kurth LLP | |
717 Texas Avenue, Suite 1600 | 600 Travis, Suite 4200 | |
Houston, Texas 77002 | Houston, Texas 77002 | |
(713) 546-5400 | (713) 220-4200 |
Large accelerated filer
o
|
Accelerated filer o | Non-accelerated filer þ | Smaller reporting company o | |||
(Do not check if a smaller reporting company) |
II-3
Item 13.
Other
Expenses of Issuance and Distribution.
$
17,825
25,500
*
*
*
*
*
*
$
*
*
To be provided by amendment.
Item 14.
Indemnification
of Directors and Officers.
Item 15.
Recent
Sales of Unregistered Securities.
II-1
Item 16.
Exhibits
and Financial Statement Schedules.
Exhibit
1
.1**
Form of Underwriting Agreement
3
.1*
Certificate of Limited Partnership of Oxford Resource Partners,
LP
3
.2**
Form of Third Amended and Restated Agreement of Limited
Partnership of Oxford Resource Partners, LP (included as
Appendix A to the Prospectus)
3
.3
Certificate of Formation of Oxford Resources GP, LLC
3
.4**
Second Amended and Restated Limited Liability Company Agreement
of Oxford Resources GP, LLC
5
.1**
Opinion of Latham & Watkins LLP as to the legality of
the securities being registered
8
.1**
Opinion of Latham & Watkins LLP relating to tax matters
10
.1**
Form of Credit Agreement
10
.2**
Investors Rights Agreement, dated August 24, 2007, by
and among Oxford Resource Partners, LP, Oxford Resources GP,
LLC, AIM Oxford Holdings, LLC, C&T Coal, Inc., Charles C.
Ungurean and Thomas T. Ungurean
10
.3**#
Employment Agreement between Oxford Resources GP, LLC and
Michael B. Gardner
10
.4**#
Employment Agreement between Oxford Resources GP, LLC and
Jeffrey M. Gutman
10
.5**#
Employment Agreement between Oxford Resources GP, LLC and
Gregory J. Honish
10
.6**#
Employment Agreement between Oxford Resources GP, LLC and
Charles C. Ungurean
10
.7**#
Employment Agreement between Oxford Resources GP, LLC and Thomas
T. Ungurean
10
.8#
Employee Unitholder Agreement among Oxford Resource Partners,
LP, Oxford Resources GP, LLC and Michael B. Gardner
10
.9#
Employee Unitholder Agreement among Oxford Resource Partners,
LP, Oxford Resources GP, LLC and Jeffrey M. Gutman
II-2
Exhibit
10
.10#
Employee Unitholder Agreement among Oxford Resource Partners,
LP, Oxford Resources GP, LLC and Gregory J. Honish
10
.11#
Employee Unitholder Agreement among Oxford Resource Partners,
LP, Oxford Resources GP, LLC and Denise M. Maksimoski
10
.12**#
Oxford Resource Partners, LP Long-Term Incentive Plan, as amended
10
.13**#
Form of Long-Term Incentive Plan Grant Agreement
10
.14**#
Form of Non-Employee Director Compensation Plan
10
.15A**#
Form of Non-Employee Director Compensation Plan Grant Agreement
10
.15B#
Director Unitholder Agreement, dated December 1, 2009, by
and among Oxford Resource Partners, LP, Oxford Resources GP, LLC
and Gerald A. Tywoniuk
10
.16
Acquisition Agreement, dated August 14, 2009, by and among
Oxford Mining Company, LLC, Phoenix Coal Inc., Phoenix Coal
Corporation and Phoenix Newco, LLC
10
.17A
Coal Purchase and Sale Agreement
No. 10-62-04-900,
dated May 21, 2004, by and between Oxford Mining Company,
Inc. and American Electric Power Service Corporation, agent for
Columbus Southern Power Company
10
.17B
Amendment
No. 2004-1
to Coal Purchase and Sale Agreement, dated October 25, 2004
10
.17C
Amendment
No. 2005-1
to Coal Purchase and Sale Agreement, dated April 8, 2005
10
.17D
Amendment
No. 2006-3
to Coal Purchase and Sale Agreement, dated December 5, 2006
10
.17E
Letter Agreement, dated December 5, 2006, by and between
Oxford Mining Company, Inc. and American Electric Power Service
Corporation
10
.17F
Amendment
No. 2008-6
to Coal Purchase and Sale Agreement, dated December 29, 2008
10
.17G
Amendment
No. 2009-1
to Coal Purchase and Sale Agreement, dated May 21, 2009
10
.17H
Amendment
No. 2009-3
to Coal Purchase and Sale Agreement, dated December 15, 2009
10
.17I
Amendment
No. 2010-1
to Coal Purchase and Sale Agreement, dated January 11, 2010
10
.17J
Amendment
No. 2010-2
to Coal Purchase and Sale Agreement, dated February 4, 2010
10
.18**
Non-Compete Agreement by and among Oxford Resource Partners, LP,
C&T Coal, Inc., Charles C. Ungurean, Thomas T. Ungurean and
Oxford Resources GP, LLC
10
.19
Administrative and Operational Services Agreement, dated
August 24, 2007, by and among Oxford Resource Partners, LP,
Oxford Mining Company, LLC and Oxford Resources GP, LLC
21
.1*
List of Subsidiaries of Oxford Resource Partners, LP
23
.1*
Consent of Grant Thornton LLP
23
.2*
Consent of Ernst & Young LLP
23
.3*
Consent of John T. Boyd Company
23
.4**
Consent of Latham & Watkins LLP (contained in
Exhibit 5.1)
23
.5**
Consent of Latham & Watkins LLP (contained in
Exhibit 8.1)
24
.1*
Powers of Attorney (included on the signature page)
*
Previously filed.
**
To be filed by amendment.
#
Compensatory plan or arrangement.
Certain portions have been omitted pursuant to a confidential
treatment request. Omitted information has been filed separately
with the Securities and Exchange Commission.
Item 17.
Undertakings.
II-4
By:
Oxford Resources GP, LLC
its General Partner
By:
II-5
Exhibit
1
.1**
Form of Underwriting Agreement
3
.1*
Certificate of Limited Partnership of Oxford Resource Partners,
LP
3
.2**
Form of Third Amended and Restated Agreement of Limited
Partnership of Oxford Resource Partners, LP (included as
Appendix A to the Prospectus)
3
.3
Certificate of Formation of Oxford Resources GP, LLC
3
.4**
Second Amended and Restated Limited Liability Company Agreement
of Oxford Resources GP, LLC
5
.1**
Opinion of Latham & Watkins LLP as to the legality of
the securities being registered
8
.1**
Opinion of Latham & Watkins LLP relating to tax matters
10
.1**
Form of Credit Agreement
10
.2**
Investors Rights Agreement, dated August 24, 2007, by
and among Oxford Resource Partners, LP, Oxford Resources GP,
LLC, AIM Oxford Holdings, LLC, C&T Coal, Inc., Charles C.
Ungurean and Thomas T. Ungurean
10
.3**#
Employment Agreement between Oxford Resources GP, LLC and
Michael B. Gardner
10
.4**#
Employment Agreement between Oxford Resources GP, LLC and
Jeffrey M. Gutman
10
.5**#
Employment Agreement between Oxford Resources GP, LLC and
Gregory J. Honish
10
.6**#
Employment Agreement between Oxford Resources GP, LLC and
Charles C. Ungurean
10
.7**#
Employment Agreement between Oxford Resources GP, LLC and Thomas
T. Ungurean
10
.8#
Employee Unitholder Agreement among Oxford Resource Partners,
LP, Oxford Resources GP, LLC and Michael B. Gardner
10
.9#
Employee Unitholder Agreement among Oxford Resource Partners,
LP, Oxford Resources GP, LLC and Jeffrey M. Gutman
10
.10#
Employee Unitholder Agreement among Oxford Resource Partners,
LP, Oxford Resources GP, LLC and Gregory J. Honish
10
.11#
Employee Unitholder Agreement among Oxford Resource Partners,
LP, Oxford Resources GP, LLC and Denise M. Maksimoski
10
.12**#
Oxford Resource Partners, LP Long-Term Incentive Plan, as amended
10
.13**#
Form of Long-Term Incentive Plan Grant Agreement
10
.14**#
Form of Non-Employee Director Compensation Plan
10
.15A**#
Form of Non-Employee Director Compensation Plan Grant Agreement
10
.15B#
Director Unitholder Agreement, dated December 1, 2009, by
and among Oxford Resource Partners, LP, Oxford Resources GP, LLC
and Gerald A. Tywoniuk
10
.16
Acquisition Agreement, dated August 14, 2009, by and among
Oxford Mining Company, LLC, Phoenix Coal Inc., Phoenix Coal
Corporation and Phoenix Newco, LLC
10
.17A
Coal Purchase and Sale Agreement
No. 10-62-04-900,
dated May 21, 2004, by and between Oxford Mining Company,
Inc. and American Electric Power Service Corporation, agent for
Columbus Southern Power Company
10
.17B
Amendment
No. 2004-1
to Coal Purchase and Sale Agreement, dated October 25, 2004
10
.17C
Amendment
No. 2005-1
to Coal Purchase and Sale Agreement, dated April 8, 2005
10
.17D
Amendment
No. 2006-3
to Coal Purchase and Sale Agreement, dated December 5, 2006
10
.17E
Letter Agreement, dated December 5, 2006, by and between
Oxford Mining Company, Inc. and American Electric Power Service
Corporation
10
.17F
Amendment
No. 2008-6
to Coal Purchase and Sale Agreement, dated December 29, 2008
10
.17G
Amendment
No. 2009-1
to Coal Purchase and Sale Agreement, dated May 21, 2009
10
.17H
Amendment
No. 2009-3
to Coal Purchase and Sale Agreement, dated December 15,
2009
II-6
Exhibit
10
.17I
Amendment
No. 2010-1
to Coal Purchase and Sale Agreement, dated January 11, 2010
10
.17J
Amendment
No. 2010-2
to Coal Purchase and Sale Agreement, dated February 4, 2010
10
.18**
Non-Compete Agreement by and among Oxford Resource Partners, LP,
C&T Coal, Inc., Charles C. Ungurean, Thomas T. Ungurean and
Oxford Resources GP, LLC
10
.19
Administrative and Operational Services Agreement, dated
August 24, 2007, by and among Oxford Resource Partners, LP,
Oxford Mining Company, LLC and Oxford Resources GP, LLC
21
.1*
List of Subsidiaries of Oxford Resource Partners, LP
23
.1*
Consent of Grant Thornton LLP
23
.2*
Consent of Ernst & Young LLP
23
.3*
Consent of John T. Boyd Company
23
.4**
Consent of Latham & Watkins LLP (contained in
Exhibit 5.1)
23
.5**
Consent of Latham & Watkins LLP (contained in
Exhibit 8.1)
24
.1*
Powers of Attorney (included on the signature page)
*
Previously filed.
**
To be filed by amendment.
#
Compensatory plan or arrangement.
Certain portions have been omitted pursuant to a confidential
treatment request. Omitted information has been filed separately
with the Securities and Exchange Commission.
II-7
4374736 8100 070895852 |
You may verify this certificate online at corp.delaware.gov/authver.shtml |
/s/ Harriet Smith Windsor
DATE: 08-07-07 |
|
State of Delaware
Secretary of State Division of Corporations Delivered 09:26 AM 08/07/2007 FILED 09:19 AM 08/07/2007 SRV 070895852 4374736 FILE |
/s/ Matthew P. Carbone | ||||
Matthew P. Carbone | ||||
Authorized Person | ||||
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10
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PARTNERSHIP: | ||||||
|
||||||
OXFORD RESOURCE PARTNERS, LP | ||||||
|
||||||
|
By: | Oxford Resource Partners GP, LLC, | ||||
|
its general partner | |||||
|
||||||
|
By: |
/s/ Jeffrey M. Gutman
|
||||
|
Name: | Jeffrey M. Gutman | ||||
|
Title: | SVP & CFO |
GENERAL PARTNER: | ||||||
|
||||||
OXFORD RESOURCE PARTNERS, GP, LLC | ||||||
|
||||||
|
By:
Name: |
/s/ Jeffrey M. Gutman
|
||||
|
Title: | SVP & CFO |
EMPLOYEE: | ||||||
|
||||||
/s/ Michael B. Gardner | ||||||
|
Name: | Michael B. Gardner | ||||
|
Address: | 22132 Westchester Rd. | ||||
|
Shater Heights, OH 44122 |
/s/ Marilyn Gardner | ||||
Spouses Name: | Marilyn Gardner | |||
2
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10
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PARTNERSHIP: | ||||||
|
||||||
OXFORD RESOURCE PARTNERS, LP | ||||||
|
||||||
|
By: | Oxford Resource Partners GP, LLC, | ||||
|
its general partner | |||||
|
||||||
|
By: |
/s/ Charles C. Ungurean
|
||||
|
Name: | Charles C. Ungurean | ||||
|
Title: | President |
GENERAL PARTNER: | ||||||
|
||||||
OXFORD RESOURCE PARTNERS, GP, LLC | ||||||
|
||||||
|
By: |
/s/ Charles C. Ungurean
|
||||
|
Name: | Charles C. Ungurean | ||||
|
Title: | President |
EMPLOYEE: | ||||||
|
||||||
/s/ Jeffrey M. Gutman | ||||||
|
Name: |
Jeffrey M. Gutman
|
||||
|
Address: | 7067 Rob Roy Drive | ||||
|
Dublin, OH 43017 |
/s/ Tracey L. Gutman | ||||
Spouses Name: | Tracey L. Gutman | |||
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3
4
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9
10
11
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PARTNERSHIP: | ||||||
|
||||||
OXFORD RESOURCE PARTNERS, LP | ||||||
|
||||||
|
By: | Oxford Resource Partners GP, LLC, | ||||
|
its general partner | |||||
|
||||||
|
By:
Name: |
/s/ Jeffrey M. Gutman
|
||||
|
Title: | SVP & CFO |
GENERAL PARTNER: | ||||||
|
||||||
OXFORD RESOURCE PARTNERS, GP, LLC | ||||||
|
||||||
|
By:
Name: |
/s/ Jeffrey M. Gutman
|
||||
|
Title: | SVP & CFO |
EMPLOYEE: | ||||||
|
||||||
/s/ Gregory J. Honish | ||||||
|
Name: | Gregory J. Honish | ||||
|
Address: | Box G4 | ||||
|
St. Clairsville, OH 43950 |
/s/ Pamela J. Honish | ||||
Spouses Name: | Pamela J. Honish | |||
2
3
4
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8
9
10
11
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PARTNERSHIP: | ||||||
|
||||||
OXFORD RESOURCE PARTNERS, LP | ||||||
|
||||||
|
By: |
Oxford Resource Partners GP, LLC,
its general partner |
||||
|
||||||
|
By: |
/s/ Jeffrey M. Gutman
|
||||
|
Name: | Jeffrey M. Gutman | ||||
|
Title: | SVP & CFO | ||||
|
||||||
GENERAL PARTNER: | ||||||
|
||||||
OXFORD RESOURCE PARTNERS, GP, LLC | ||||||
|
||||||
|
By: |
/s/ Jeffrey M. Gutman
|
||||
|
Name: | Jeffrey M. Gutman | ||||
|
Title: | SVP & CFO | ||||
|
||||||
EMPLOYEE: | ||||||
|
||||||
/s/ Denise Shaw | ||||||
|
Name: | Denise Shaw | ||||
|
Address: | 275 Crossing Creek N | ||||
|
Gahanna, OH 43230 |
Exhibit A-1
Exhibit A-2
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3
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5
6
7
8
9
10
11
12
PARTNERSHIP: | ||||||
|
||||||
OXFORD RESOURCE PARTNERS, LP | ||||||
|
||||||
|
By: |
Oxford Resources GP, LLC,
its general partner |
||||
|
||||||
|
By: |
/s/ Jeffrey M. Gutman
|
||||
|
Name: | Jeffrey M. Gutman | ||||
|
Title: | SVP & CFO |
GENERAL PARTNER: | ||||||
|
||||||
OXFORD RESOURCES GP, LLC | ||||||
|
||||||
|
By: |
/s/ Jeffrey M. Gutman
|
||||
|
Name: | Jeffrey M. Gutman | ||||
|
Title: | SVP & CFO |
DIRECTOR: | ||||||||
|
||||||||
|
/s/ G. Tywoniuk
|
|||||||
|
Name: | G. Tywoniuk | ||||||
|
Address: | 106 Avenue E | ||||||
|
Redondo Beach CA | |||||||
|
90277 |
/s/ Zuzana Bilowit | ||||
Spouses Name: | Zuzana Bilowit | |||
Page | ||||||
|
TABLE OF CONTENTS | |||||
1.
|
DEFINITIONS | 1 | ||||
|
||||||
2.
|
PRE-CLOSING REORGANIZATION; ACQUISITION TRANSACTION; TRANSACTION CONSIDERATION | 15 | ||||
|
2.1 Pre-Closing Reorganization | 15 | ||||
|
2.2 Acquisition Transaction | 19 | ||||
|
2.3 Transaction Consideration | 19 | ||||
|
2.4 Allocation of Transaction Consideration | 20 | ||||
|
2.5 Working Capital Adjustment | 20 | ||||
|
||||||
3.
|
CLOSING | 23 | ||||
|
3.1 Closing | 23 | ||||
|
3.2 Closing Deliveries | 23 | ||||
|
||||||
4.
|
REPRESENTATIONS AND WARRANTIES OF SELLERS | 24 | ||||
|
4.1 Organization and Good Standing; Power | 24 | ||||
|
4.2 Authority; No Conflicts; Consents | 25 | ||||
|
4.3 Ownership | 26 | ||||
|
4.4 Subsidiaries | 26 | ||||
|
4.5 Financial Statements | 26 | ||||
|
4.6 Books and Records | 27 | ||||
|
4.7 Properties | 27 | ||||
|
4.8 Condition and Sufficiency of Certain Assets | 30 | ||||
|
4.9 Liabilities | 30 | ||||
|
4.10 Taxes | 30 | ||||
|
4.11 Inventory | 32 | ||||
|
4.12 Coal Interests | 32 | ||||
|
4.13 Absence of Certain Changes and Events | 33 | ||||
|
4.14 Contracts; Defaults | 33 | ||||
|
4.15 Environmental, Health and Safety Matters | 34 | ||||
|
4.16 Intellectual Property | 36 | ||||
|
4.17 Employees | 36 | ||||
|
4.18 Labor Relations; Compliance | 36 | ||||
|
4.19 Employee Benefits | 37 | ||||
|
4.20 Compliance with Legal Requirements; Governmental Authorizations | 38 | ||||
|
4.21 Legal Proceedings; Orders | 42 | ||||
|
4.22 Insurance | 43 | ||||
|
4.23 Solvency | 44 | ||||
|
4.24 Relationships with Related Persons | 44 | ||||
|
4.25 No Brokers or Finders | 45 | ||||
|
4.26 Certain Payments; Grants and Allowances | 45 | ||||
|
4.27 Customers and Suppliers | 46 |
i
Page | ||||||
|
4.28 Disclosure | 46 | ||||
|
4.29 Scope of Representations, Warranties and Covenants | 46 | ||||
|
||||||
5.
|
REPRESENTATIONS AND WARRANTIES OF BUYER | 47 | ||||
|
5.1 Organization and Good Standing | 47 | ||||
|
5.2 Authority; No Conflicts | 47 | ||||
|
5.3 Certain Proceedings | 47 | ||||
|
5.4 No Brokers or Finders | 48 | ||||
|
5.5 Scope of Representations, Warranties and Covenants | 48 | ||||
|
||||||
6.
|
COVENANTS OF SELLERS | 48 | ||||
|
6.1 Operation of Business | 48 | ||||
|
6.2 Access and Investigation | 49 | ||||
|
6.3 No Negotiation | 49 | ||||
|
6.4 Destruction of Confidential Information | 50 | ||||
|
6.5 Required Approvals of Governmental Bodies | 50 | ||||
|
6.6 Commercially Reasonable Efforts | 50 | ||||
|
6.7 Restrictive Covenants | 50 | ||||
|
6.8 Employee Matters | 52 | ||||
|
6.9 Liabilities of Phoenix Group Entities | 52 | ||||
|
6.10 APE Financial Statements | 52 | ||||
|
6.11 Rose France Reserves | 53 | ||||
|
||||||
7.
|
COVENANTS OF BUYER | 53 | ||||
|
7.1 Required Approvals of Governmental Bodies | 53 | ||||
|
7.2 Commercially Reasonable Efforts | 54 | ||||
|
7.3 Release of Reclamation Obligations Collateral | 54 | ||||
|
7.4 Employee Matters | 54 | ||||
|
7.5 AT Liabilities | 54 | ||||
|
||||||
8.
|
MUTUAL COVENANTS OF PARTIES | 54 | ||||
|
8.1 Further Actions | 54 | ||||
|
8.2 Public Announcements | 55 | ||||
|
8.3 Tax Matters | 55 | ||||
|
8.4 Consideration of Alternative to Escrow | 56 | ||||
|
||||||
9.
|
CONDITIONS PRECEDENT TO OBLIGATION OF BUYER TO CLOSE | 56 | ||||
|
9.1 Accuracy of Representations and Warranties | 56 | ||||
|
9.2 Performance by Phoenix AA Parties | 56 | ||||
|
9.3 Consents | 57 | ||||
|
9.4 Additional Documents | 57 | ||||
|
9.5 No Proceedings | 58 | ||||
|
9.6 No Prohibition | 58 | ||||
|
9.7 Business Conduct and No Material Adverse Effect | 58 | ||||
|
9.8 Employee Matters | 58 |
ii
Page | ||||||
|
9.9 Recoverable Tons of Coal | 58 | ||||
|
9.10 AT Reclamation Obligations | 58 | ||||
|
9.11 AT Coal Reserves Quality | 59 | ||||
|
9.12 Mining Permit Approval | 59 | ||||
|
9.13 Abatement of Violations | 59 | ||||
|
||||||
10.
|
CONDITIONS PRECEDENT TO OBLIGATION OF SELLERS TO CLOSE | 59 | ||||
|
10.1 Accuracy of Representations and Warranties | 59 | ||||
|
10.2 Performance by Buyer | 59 | ||||
|
10.3 Initiation of Action to Obtain Release of Reclamation Obligations Collateral | 59 | ||||
|
10.4 Additional Documents | 60 | ||||
|
10.5 No Proceedings | 60 | ||||
|
10.6 No Prohibition | 60 | ||||
|
||||||
11.
|
TERMINATION | 60 | ||||
|
11.1 Termination Events | 60 | ||||
|
11.2 Termination Effect Generally | 61 | ||||
|
11.3 Termination Fee | 62 | ||||
|
||||||
12.
|
INDEMNIFICATION; REMEDIES | 62 | ||||
|
12.1 Survival; Right to Indemnification not Affected by Knowledge | 62 | ||||
|
12.2 Indemnification and Payment of Damages by Sellers | 62 | ||||
|
12.3 Indemnification and Payment of Damages by Buyer | 62 | ||||
|
12.4 Time Limitations | 63 | ||||
|
12.5 Limitations on Amount - Sellers | 63 | ||||
|
12.6 Limitations on Amount - Buyer | 64 | ||||
|
12.7 Excluded Damages | 64 | ||||
|
12.8 Procedure for Indemnification - Third Party Claims | 64 | ||||
|
12.9 Procedure for Indemnification - Other Claims | 65 | ||||
|
12.10 Recovery of Indemnification Amounts | 66 | ||||
|
12.11 Exclusive Remedy | 66 | ||||
|
||||||
13.
|
GENERAL PROVISIONS | 66 | ||||
|
13.1 Expenses | 66 | ||||
|
13.2 Confidentiality | 66 | ||||
|
13.3 Notices | 67 | ||||
|
13.4 Further Assurances | 68 | ||||
|
13.5 Waiver | 68 | ||||
|
13.6 Entire Agreement and Modification | 68 | ||||
|
13.7 Schedules | 68 | ||||
|
13.8 Assignments, Successors and Limited Third-Party Rights | 69 | ||||
|
13.9 Severability | 69 | ||||
|
13.10 Headings; Construction | 69 | ||||
|
13.11 Time of Essence | 69 |
iii
Page | ||||||
|
13.12 Governing Law | 69 | ||||
|
13.13 Dispute Resolution | 69 | ||||
|
13.14 Counterparts | 70 | ||||
|
||||||
SIGNATURES | 71 |
iv
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
(A) | are valid, outstanding and enforceable; | ||
(B) | to the Knowledge of any of the Phoenix Group Entities, are issued by an insurer that is financially sound and reputable; | ||
(C) | are sufficient for compliance with all Legal Requirements and Contracts to which any of the Phoenix Group Entities is a party or by which any of the Phoenix Group Entities is bound; and | ||
(D) | do not provide for any retrospective premium adjustment or other experienced-based or tail liability on the part of any of the Phoenix Group Entities or any director thereof; |
44
45
46
47
48
49
50
51
52
53
54
55
56
57
58
59
60
61
62
63
For purposes of determining the amount of any Damages under this Article 12, and notwithstanding anything to the contrary in this Agreement including without limitation the definition of Damages, such amount shall exclude any and all Damages which are consequential, indirect, incidental, lost profits or revenues, cost of capital, loss of business reputation or opportunity, or special and punitive damages, except as and to the extent any such Damages were actually awarded, paid or incurred in a third party Claim. |
64
65
66
Phoenix AA Entities:
|
Phoenix Coal Inc. | |||
|
National City Tower, Suite 3650 | |||
|
101 South Fifth Street | |||
|
Louisville, Kentucky 40202 | |||
|
Attention: Dustin Angelo, | |||
|
Chief Financial Officer | |||
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Telephone: | |||
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Facsimile No. | |||
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||||
with a copy to:
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Greenebaum Doll & McDonald PLLC | |||
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300 West Vine Street, Suite 1100 | |||
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Lexington, Kentucky 40507 | |||
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Attention: Bruce E. Cryder, Esq. | |||
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Telephone: (859) 231-8500 | |||
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Facsimile No.: (859) 255-2742 | |||
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Buyer:
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Oxford Mining Company, LLC | |||
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544 Chestnut Street | |||
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P.O. Box 427 | |||
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Coshocton, Ohio 43812-0427 | |||
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Attention: Charles C. Ungurean, | |||
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President and Chief Executive Officer | |||
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Telephone: (740) 622-6302 | |||
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Facsimile: (740) 628-8268 | |||
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||||
with a copy to:
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Squire, Sanders & Dempsey L.L.P. | |||
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2000 Huntington Center | |||
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41 South High Street | |||
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Columbus, Ohio 43215 | |||
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Attention: Daniel M. Maher. Esq. | |||
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Telephone: (614) 365-2700 | |||
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Facsimile No.: (614) 365-2499 |
67
68
69
70
71
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By: | |||||||||
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Name: |
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||||||||
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Title: | CFO |
-2-
-2-
-3-
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-5-
Buyer : | Sellers : | |||||||||
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Oxford Mining Company, LLC | Phoenix Coal Inc. | |||||||||
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By:
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/s/ Jeffrey M Gutman | By: | /s/ David Wiley | |||||||
Name:
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Name: |
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|||||||
Title:
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SVP & CFO | Title: | President & CEO | |||||||
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Phoenix Coal Corporation | ||||||||||
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By: | /s/ David Wiley | ||||||||
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Name: |
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||||||||
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Title: | President | ||||||||
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Acquired Company : | ||||||||||
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||||||||||
Phoenix Newco, LLC | ||||||||||
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||||||||||
By: Phoenix Coal Corporation, its sole member |
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By: | /s/ David Wiley | ||||||||
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Name: |
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Title: | President |
-6-
2
#9 Surface
Old Tonnage
New Tonnage
425
520
5
5
80
80
3,702,600
4,530,240
95
%
95
%
3,517,470
4,303,728
20.2
20.2
45
35
5
5
80
80
392,040
304,920
35
%
35
%
137,214
106,722
350
465
3.33
3.33
80
80
2,030,767
2,698,019
95
%
95
%
1,929,229
2,563,118
19.3
19.3
135
50
3.5
3.5
80
80
823,284
304,920
75
%
75
%
617,463
228,690
15
15
6,201,376
7,202,258
19.4
19.7
Other Phoenix | Jurisdiction of | |||
Reorganization Entity | Organization | Ownership | ||
C&R Coal Company, Inc.
|
Kentucky | R&L Winn, Inc. (100%) | ||
Charolais Coal Sales, LLC | Delaware | Phoenix Coal Corporation (100%) | ||
Charolais Mining Company, LLC | Delaware | Phoenix Coal Corporation (100%) | ||
Evergreen Mineral Co., Inc. | Kentucky | Phoenix Coal Corporation (100%) | ||
Old Liberty Equipment Co., Inc. | Kentucky | Phoenix Coal Corporation (100%) | ||
Phoenix Coal Processing Company, LLC | Delaware | Phoenix Coal Corporation (100%) | ||
R&L Winn, Inc. | Kentucky | Phoenix Coal Corporation (100%) | ||
Renfro Equipment Inc. | Kentucky | Phoenix Coal Corporation (100%) | ||
Schoate Mining Co., LLC | Kentucky | Evergreen Mineral Co., Inc. (50%) / Old Liberty Equipment Co., Inc. (50%) |
3
4
Hilco Appraisal Services LLC August 10,2009 Phoenix Coal, Inc. Phoenix Coal, Inc., 1215 Nebo Road, Madisonvitle, Kentucky I HHooRet* Rank * Unit* Year Make Effective Data: July 30,2009,. r-:- -:.-: , ..%v*i- OrdBriy F* UndeWon Msiwt V*w Value t : . » oozens 22 803 1881 CaterpUar D9N Crawler Tractor W002874 SCH (BRIAR HILL) ~ 23 871 1985 CaterpUar D9L Crawler Tractor 14Y02974 Counterweight. UC Good SCH (BRIAR Hill.) Y 21 527 1883 CampMsr 09L Crawler Tractor 14YB1325 Ejdra undercarriage aralIHe for unit RL V 24 879 2008 CatBtpMar D6TLGP Crawler Tractor KP2S2495 Segemerts down, showing wear SCH (BRIAR HILL) V 25 C142 2005 Caterpillar 08T Crawler Trador KPZ00765 SCH (BRIAR HILL) RH 26 CMS 1998 CaterpHar 08R Crawlar Tractor 7XM0281S RB (JESSUP) 27 C152 1S85 Caterpillar pet Crawler Tractor 53Y03540 Winch KOMINE 28 423 2005 Caterpillar D7RLGP Crawler Tractor ABJ00602 KOMINE 30 0148 1894 Caterpaiaf D7H Crawler Tractor 4K305775 Mew Undercarriage being msaledettmieof Inspection KOMINE Y 28 9521 1969 (Est.) CaterpUar D7F Crawler Tractor 61G00478 G5 v 31 804 1990 Caterpillar D6HLGP Crawler Tractor 1KDO40B8 CCC L N 3 3 886 2007 Calarpttar D11R Crawler Tractor 4,288 7PZD5O10 Undercarriage down SCH (BRIAR HILL) Y 5 5 424 2007 Caterpillar D11R Crawler Tractor 7P2S009 RL 1 t 529 2O06 Caterpillar D11R Crawler Tractor 6,791 7PZD1448 KOMINE 2 2 878 2008 Caterpillar D11R Crawler Tractor 7,381 7PZ01450 KOMINE 6 7 C158 2006 CaterpUar D11R Crawler Tractor 7P201493 UC Appro*. 60% SCH (BRIAR HILL) RH 7 6 901 2001 CatarpMar 011R Crawler Tractor 09TR0034S Purchased with CCC SCH (BRIAR HILL) RH 6 8 612 1997 CaterpUar 011R Crawler Tractor 08TROO212 Purchased wttr/REI RB (JESSUP) 4 4 C159 2006 CaterpWar D11R Crawler Tractor 07P2B1449 UC Appro* 60% SCH (BRIAR rfflX) RH 12 13 528 1998 Caterplhr D11N Crawler Tractor 74275288 KOMINE 15 16 C1S1 1997 Caterpillar D11N Crawler Tractor 74Z75270 RL 13 14 827 1994 CatopMar D11M Crawlar Tractor 74Z75242 Not In service, UC poor, machowFalrCaid SCH (BRIAR HILL) 14 15 C157 1990 Caterpillar D1 IN Crawlar Tractor 7420776 Retxitt Engine IrrstafeBon being done at lime ot Inspection RL Y 20 C149 1988 CalerpWar DION Crawler Tractor 2YD00824 RH (JESSUP) Y 18 19 525 1984 CatenjOlaf 0101 Crawler Tractor 84W00974 WtianAwBiMe? CCC N 19 20 523 1981 CaterpBlar D10L Crawler Tractor B4W00703 AviDeMitjr Decreasing, pent Han) to Get, * Kecarnaaon ixvy REI (JESSUP) Y 17 18 C150 1981 Caterpillar 010 Crawler Tractor 84W00692 Radamaoon Tractor Move to Jump wtm CCC WrbrtaOut CCC Y 16 17 C155 1978 Caterpffjar _,g Crawler Tractor 84W00S80 REI (JESSUP, Y 10 10 868 2008 Komatsu D475A-6 Crawler Tractor 20104 Counisrwelaht SCH (BRIAR MILL) Y 9 9 807 2005 Komatsu D476-SA Crawler Tractor 20063 Newer Undercarriage, 4 BBUSS Ripper SCH (BRIAR HILL) Y 11 11 852 2003 Kometou D475A-3 SO Crawler Tractor 10743 Couftterwdght. Segrnerus SCH (BRIAR HILL) Y LOADERS I I Y |
Hilco Appraisal Services IL.C August 10,2009 Phoenbt Coal. he. Phoenix Coal. Inc., 1215 Nebo Road, IVIadisonvilte, Kentucky WeoRaf* Rank* Un»# Year Mate «otM- h fipiMSfM m Orderly Fair liquidator! Market Vak» Value * * 32 1 535 2008 Catnpllar 992K Wheel Loader H4C00345 RL 33 3 534 2007 CaterpMar 9920 Wheel Loader 6S79 AZX00629 TOKO KOMINE 34 4 C241 2007 Cateipiar 992G Wheel Loader AZX00823 SCH (BRIAR HILL) 35 6 C243 1997 CaterpWw 992G Wheel Loader 7HR0009B KOMINE 36 6 916 1996 CatarpHar 992D Wheel Loader 7MJ75014 Ugh LB RSIiJESSUPJ 41 11 533 1994 CaterpSar 992C Wheel Loader 49Z75248 RBljesSUP) 40 10 C244 1993 CateipMar 992C Wheel Loader 49Z00670 WghUft ISLAND DOCK 38 8 856 1991 CatwpOar 992C Wheel Loader 49Z01901 SghLH SCH (BRIAR HIU-1RH 39 9 C242 1991 Caterpillar 992C Wheel Loader 49Z001316 V. 3? 7 B75 1987 Caterpillar 992C Wheel Loader 4BZO103O Standard UK, Fair Cond. SCH (BRIAR HILL) RH v 42 12 C245 1985 Catetp3tar 992C Wheel Loader 49200863 Standard Lai When Available, Rubber Fair-Poor CCC Y 43 13 9IT 1981 Caterpillar 992C Wheel Loader 42X00943 High Lilt TOKO CR 44 14 531 1980 CaterpMar 992C Vlfticel Loader 42X00720 ISLAND DOCK 4S 15 649 1978 CarapHar 992C Wheel Loader 042X00217 Standard Lift ISLAND DOCK 46 C24T 1994 Caterpillar 9888 Wheel Loader 50W05703 REKJESSUP) 48 C248 1988 CaterpMar 988B Wheel Loader 50W09272 SCH (BRIAR HILL) 48 431 1988 CaterpNar 088B Wheel Loader 50W08880 KOMINE 47 432 1977 Cateipillar 988B Wheel Loader 50W01740 RL 52 857 1996 Cateipiar 950FII Wheel Loader 05SK02637 SCH (BRIAR HILL) 57 BOS 1986 Draeter 5208 Wheat Loader 41966 REI(JESSUP) 50 813 1994 Komatsu WA600 Wheel Loader UA50017 SCH (BRIAR HILL) 55 C212 1978 A4ichigan 4758 Wheel Loader 42U224C ISLAND DOCK 66 C215 19T7 Michigan 475B Wheel Loader 42W179C ISLAND DOCK 54 C167 1979 Michigan 380 Wheel Dear 484A107K ISLAND DOCK 51 919 1983 Michigan Clark 275C Wheel Loader 492A2S1 RL 53 918 1997 Volvo 180C Wheel Loader L180CVB04S5 Coal BM., Smal rubber, SCH (BRIAR HILL) HAUL TRUC JSS 70 New C720 2009 CaterpWar 777F OffMjrtway 2,419 0JRPO1866 KOMINE 58 New 507 2008 Caterpilar ___ OIF Highway OJRP01082 RL 59 New 508 2008 Caterpilar 777F Of! Highway BJRP01234 RL 60 New 509 2008 CatorpHar 777F Off Highway 0JRP01305 RL 61 Now 887 2008 CaterpMar 777F Off Highway 4,124 0JRP01367 KOMINE r 62 New 888 2008 Cateipiar 777F Of? Highway 3,796 0JRP01S04 KOMINE r 63 Naw 889 2008 Csterpfflar 777? Off Highway 3,987 OJRP01506 KOMINE v 68 New ___C718 2008 Catarp&ar 777F Off Highway 2,887 fWRP01612 SCH (BRIAR HILL) RH y 69 Naw C719 2006 Catarpnar f OffHhway 2.816 0JRP01613 SCH (BRIAR HILL) RH Y- 71 1 936 1994 Caterpillar 777C Off Highway 4XJ75004 SCH (BKIAH HILL) RH n 2 937 1994 Caterpillar 777C Off Highway 4XJ75003 SCH (BRIAR HILL)RH Y 73 3 805 1994 CaterpOar 777C Off Highway 4XJ401 SCH (BRIAR HILL) RH t 74 4 801 19S4 CaUrpiar 777C Off Highway 4X1306 SCH (BRIAR HILL) RH Y 75 5 C710 1989 Caterpilar 7778 Off Highway 4YC00S31 SCH (BRIAR HILL) RH Y 91 21 9507 1985 Caterpllar 777A Off Highway 84A1479 RB (JESSUP) Y 93 23 402 1985 CaterpMar 777A Off Highway 84A1715 CR y 92 22 403 1984 CaterpMar 777A OffWohway 84A01414 CR Y 89 19 508 1983 Caterpillar 777A Off Highway 84A124S CR Y |
Hilco Appraisal Services LLC August 10,2009 Phoenix Coal. Inc. Phoenix Coal, Inc., 1215 Nebo Road, Madisonville, Kentucky HtksoReW Rar*§ Unit* Year MateA-/ EteaftS0a*bauh36aa!(«S s fci£;v* Model ;. iTypoj::. tap. - Order* Fa* Uqiadefton Market VWue Vam» S3 13 505 1981 CaterpBsr 777A CHI Highway S4A909 REI (JESSUP) r m 14 C703 1981 Caterptsar 77TA Off Highway MA009BB RB(JESSUP) Y 88 18 C705 1981 CaterpSar 777A Off Highway B4A000987 When Available? CCC N 95 25 401 1981 Caterpiar 777A OrTHIghway 84A843 No Power, Coat Hauler Only RL Y 78 a C709 1980 Cateipllaf 777A Off Highway 84A006S9 Cummkn Engine REI (JESSUP) V 85 15 503 1880 CatarpHar 777A Off Highway 84A073S Back Up Truck tor Both Schoated Operations SCH (BRIAR HILL) Y 86 18 504 I960 Caterpitar 777A Olf Highway 64A00855 RB (JESSUP) Y 87 17 C707 1980 Caterpillar 777A Oil Highway 84A00631 CCC N 94 24 C704 1980 CaterpBar 777A Off Highway 84A0O872 CCC N 90 20 C708 1979 CsnrpHar 777A Off Highway 84A00487 REI (JESSUP) Y 64 New 895 2008 Komatsu 785-7 Off Highway 8,935 A10079 SCH (BRIAR HIU) Y 65 New 896 2008 Komatsu 785-7 Off Highway 2,112 A10089 SCH (BRIAR WLL) V 66 New 897 2008 Komatsu 785-7 Off Highway 831 A10090 SCH (BRIAR HU.) V 67 New 898 2008 Komatsu 785-7 Off Highway 1,506 A10D93 SCH (BRIAR HILL) Y 77 7 B54 1997 (Est) Komatsu 330MHaulpak Off Highway CF2447BBFP41BP Unit being serviced at erne of inspection SCH (BRIAR HIU) Y 78 8 853 1997 (Esl.) Komatsu 330MHSUlpak OR Highway CF244798CFP41BP SCH (BRIAR HU) V BO 10 830 1997 (EM.) Komatsu 330MHaufpak Off Highway CF24480BFP41BW SCH (BRIAR HILL) Y 79 9 B3E 1996 (Est.) Komatsu 330M Haulpiik OW Highway CF24418BFP41BW SCH (BRIAR HILL) Y 81 11 828 1998 (Ell.) Komatsu 330MHaulpBll Off Highway CF24432BFP41Brl Unit in* in use during innpm, Iwifi SCH (BRIAR HILL) Y 82 12 829 1998 (Est) Komatsu 330MHaB«ilt Off Highway CF24413BFP41BE SCH (BRIAR HtLL| Y GRADERS, BRILLS. EX CAVATORS Y 96 890 2008 Volvo (3990 Motor Grader 4,049 42046 SCH (BRIAR HILL} Y 98 956 1988 Catnpllar 16G Motor Grader 93U026S1 KOMINE Y SB 0407 1988 GatapUar 16Q Motor Grader 93U2S43 REHJESSUP) Y Wl 806 1987 CaterpHar 16G Motor Grader 93002425 rapper RL Y too C405 19B3 CaterpBar 1BG Motor Grader 93U02227 SCH (BRIAR HILL) RH Y 97 C40S 1981 CatorpRer 160 Motor Grader 93U1394 ISLAND DOCK Y 102 466 Drilech D45KS CMS 731618 KOMINE Y 103 614 DrHtech D40KS Drill 731537 REI (JESSUP) Y 104 C309 Ingereof Rand DMLX1200 DrilJ 7137 SCH (BRIAR HILL) Y 105 9310 DrHtech D45KS Drill 731850 Machine He during inspection. Right side engine enotourse mte»ig,FalrCorKl. SCH (BRIAR HILL) Y 106 C308 1999 psL) Ingersol Rand RDM50EXL1200 Dili 2874 SCH (BRIAR HILL) RH Y 107 C3« 1885 (&t) DrWech C40K2L Drll 731117 KOMINE Y 108 547 1988 (Est.) Drlstch D40K Orfl 731184 RL Y 109 546 1988 (Ett.) Driltech D40K OriB 731089 Machine nee rough appearance, ovaral cond. rsfr SCH (BRIAR HILL) RH Y ; |
Hilco Appraisal Services LLC August 10,2009 Phoenix Co«I, Inc. Phoenix Coal, Inc 1215 Nsba Road, Madisonville, Kentucky rtfcoRr* Rank* UnM year Make -.y£; \ MsfkMiS* :: IKwSi->*<%4Mhifi e Mi\f [ WB», ; ., w :-,;..J05BaonA >. (nap (Marty Fak UqukJieon Market Value Value S f 110 541 1894 HRacht ExraT Hyd. Excavator 172-M88 Rough Apperenee, Sheet ircetel dameae, fcAakte catmks beat, rigKt akla angina anctounuB / UhrmI htnu pail tad at RL 111 479 2008 Komatsv PC600 Hyd. Excavator 20149 TO MINE * 111 932 1997 HttacM EX7S0 Hyd. Excavator 17C-508S VefyWaak.No Spare »8 Spread! CCC N 113 C903 3004 LI* Belt 800LX Hyd. Excavator KBJ49008 RB(J658UP) v 114 846 1995 Hitachi 700H Hyd. Ewsrvator 172-1589 Undotcaniaga ahoaaig a&jns of reptceemant won, IIC appnac. 20% Ife remaeig 8CH (BRIAR MIX) Y 115 884 1994 Hitachi EX70OB6 Hyd. Excavator 172-1445 SCH (BRIAR HIU.JRH v 116 894 2007 Komatsu SJaboLol Hyd. Excavator 55024 5CH [BRIAR HILL) v 117 C93S 1896 f£st.) Unk BeH SOOOQuantam Hyd. Excavator 800Q2-1117 SCH tBRIAR HILL) RH v 118 834 1990 HitacW EXlBOOLD Hyd. Front Shovel 182-0185 SCH (BRIAR HILL) RH 1 its 881 2008 Hitachi ExiioaLD Hyd. Front Shovel 5,498 FF018K0001007 SCH (BRIAR HILL) 1 -: |
001 Phoenix Cod Capontfon MatftHiadAsttRttf-GMPBs* Fort* fscaJyaar ended Dacarter 31,2009 Anximibt8dDapt«(oncSSpiaascfCunei<ThRjDat& Book* Infernal FYEMorthxDewrter kite Erf wtt It lllh-l QkBwdf BnSQ NttaM &IT1TD AnmOkp/ ToUAcan IttBwt S»fe Co dm*** D* OH in o* Co* ttifUkr* ItaMM OeH EMp Ewbh TmOJ tap ttk* Kky vum*Mm*WBMmmm msusaoc MB 00 08 (fl/SVWOO 4%C5i1i m BA) 42£S4j44 Off M» MO M» 000314 Und-CMon KflSMM W 00 00 O7&1QQ09 on KJ50MO MO SSJSOQJOO 000 040 MO 000 3S#0D0 M.taMMolN»>1«gMMMM( 42*5414 3E£0M0 ADO 79,154.14 aoo aoo MO woo 179,154,14 LMsRerMnmjVUuB HflToW 42#4.14 36,50100 010 71,154.14 aoo aoo 0« aoo 8 79.1S4.14 OlftMAMNe- HMMMMMO DOOM BrikMg-OWqn 03818009 SF 4000 0781fflW MO 83SM0 MO t93#0JIO MO zone MO 2015*2 IS1.4S438 00081? Bi*»n(-ai*o(i-ButttteioJ*s vnwm SF ?ooooraiaw (UK 9MSU3 OJOO 9WMS MO 20190 000 201 JO 9§o54vf3 000318 Billing. OMW-BkHciJ ariavm SF 4000 tfKWXS (L00 7171248 W» 7171249 too 1S3J0 aoo 1633* 785*141 000319 ArOpmwHwCtekB D7B1ftO08 SF 19 ffl OTSI/ZOOB 100 2M9B.13 0J0 2S99B>13 Ofl» Z3U1 aoo 23U1 2835942 nra» AOMi-ciunn ormaoM SF 10 00 BTflt/2009 urn 44.48W3 MO 44,40EyS3 MO 3JM5 aoo S7105 44V03&5S 000371 Pwmwr-aata D7OT2008 SF tOOOOWSBS aoo Usaoo 000 IM&OO ooo ItUK aoo mm N.W1.94 00032 CDnDimfan-OHlM 074010001 SF 1000B7fi1ffl)0» OflO Mtisi 000 U11.91 0J0 4126 MO 4926 SJ62B Ql MM tat No . KNMOWtta OHO 457JBSS9 O00 467,8233 MO JM08 aoo 3?&tt |464,7«51 LesstenmngViim NetTou 0J» m<mi 0X0 467.SZ3S9 aoo 30510 aoo 3*0108 f 4«,7liS1 G*Mta*to.K2004»tt«a 00OOM 901 9MCa»rpirD1lflCnrt9fTwto «waw SL »ODO7aW0O9 357,97121 wo aoo x/rpua IMD9.47 jaoia aoo 10731JB $25Q$79.15 G000C3 52? HKCKBpfcfMLCfwteTrrta 0001/2006 SL 10 00 07/3WS09 aUBIM MO aoo 2Wt34 uasg 1.SSM0 000 mx 18,424* C000M CflDKOnferDidDr OMIflW Si 10C0 07J91O09 wm m aoo 9,47508 nx SSU4 MO 20 6*fi» 000005 916 2003C*9KD«ittwTWLl»fcr OWIfiB* a loooowJiaw 371,7002 aoo aoo 373.7&02 9O,JS06 aim* OM 112,12190 2S1J34.12 000006 917 !MlC*992CftiifterTMljrt* «mm Si 10 00IM100W J3|6M* on IO0 2MBB21 5,72419 \mm 000 7,106.76 KJ82.4S 000006 91) i9t3CMi275CFWibrrndla«ter 0W1BW a woooToiais 2OT.M MO aoo 2W4 M0U4 I.3K09 too 8,71193 15JW121 C00009 910 l»7Valwil80CAiM«rrnif|jtwl«r otovano a 10 00 0701/2009 34*17.74 MO on 34,217.74 82&28 1J996JH MO 102S5J1 235243 Ai«Mii2H« MZ/w PV1 |
001 Ptioenix Coal Corporation Monty FbriAottl-GAAPBoofe Fore»lical year trtWDeoeniw 31,2009 AccumAated DepracWon displayed as of Cunwt Thu Data Book=Internal ITO Won** December kt&e W UN BttWQ DtfMMf taflpjl MgrAoGUM CurYTO ttamBq/ TeWtam NrtBoct Sjpffa Co PwafyiM D* DM lit Mi Coi fcqdUBm TnoMM 04 Dttr Burnt DW4M Ov VMka Xt* On. AMtnDGtN9 11 nmvtoWB O00I55 FWKWK* O&W3005 SF 10 00 0X91/2090 vnm OHO 000 277*80 99545 15205 000 1.157a 1520a 000175 IfciiEffiMgencyilMliGilKit Kfll/2096 SF 10 00 07/31/2)09 3,115a 0.00 000 3,11409 157.48 wia 000 1039a 2,078.73 oooie To* laowoM SF 1009 O7AV20Q9 vm 000 ooo 17*452 716.42 10234 ooo 5H.76 935.76 oxw Ft» TRUCK nffliffloa SF 0500 0791/2803 21/59151 on ooo 21/59901 167455 253154 000 W50649 2593a ooow 1971 immttMStW 0MU2005 SF 05 X 07/31/2009 5/90000 000 000 510040 4/40000 70000 000 5,woa sooa 000219 fCtMS0O3B464K oam/2005 SF WOO O7/SV2009 1«J30 ooo OJOO 1522a 40079 5959 000 450.49 552a 000220 17T Fortf taMmsSEMMl 04010005 SF MOO 07/31/2009 250000 000 ooo 250000 93750 14553 000 1JK133 1,41657 000221 GtvBofbrrSFY KHIfiDOS SF 1000 07/31(2009 409JD ooo OOO mm 133.19 2350 000 157a 2S2J1 000222 iMr lomaw SF 10 01 07/518009 83QyM 009 000 12O00 26050 47a 000 314a 90567 000281 CariSpnngVibnte-SizaiK-CKff amvmt SF IflflOOTfllfflDS 173257 ooo 000 173257 25J0S 10106 000 35395 U7152 00(1302 GGDatfKceswnt oajwooa SF 0700 07/310000 34,07500 ooo ooo 3*07500 4,45756 2jo»a ooo 7a?.M 26767a GA.*MAa**> 162OWMMO-80 1999,263a ooo OOO tflSSSSuB 504727a 119a2.fi 000 sHtwa 11575,14355 UsRennnngVii ues NetToW 1«9»38 ooo 000 1359263a 804727a inas-w ooo 624,119a 11375,143a Gn.AWrtn6CtNO: =1t3000D404HO 050041 Ploeer 0X010006 SF 05 00 0701/2000 150MO 000 Oft 15D0O0 15000 iTsa 000 iosa 147500 000042 Pwar Retain 0201/2006 SF 0500 0781/2009 99552 ooo ooo 09552 S22a 8H.47 000 626a 25007 000043 CoflhunciWionB OWWOOS SF 10 00 07SV2009 513J5 ooo 000 513*5 MU2 2557 oa 171.29 342* 000044 IDesk 0*01/2036 SF 10 00 07/11(2009 95254 ooo ooo 55294 xis& ssa ooo 317a 6355) 000O45 Sawing ItBuBmOigUKipa o&maoM SF 05 00 07/31/2009 456« ooo ooo 45650 2432 5357 000 29679 15951 000048 f«t Proal leg* Sin FJing CabM BSOIfiOOS SF iooo 07/31/2009 1*1.14 ooo ooo 1,»U4 47177 11556 ooo 594a iaeii ooooso AgatuknSowwtfTvndnalSarw atfSoHMieUcMHa 09JW20O6 SF 05 00 O70WOO9 12JXH.12 003 000 nooi.« M87.18 1516.79 ooo 758357 M17.15 000051 D«IL«»CP BjnyCoyfc OWV2006 SF 05 oo mum 1532» ooo 000 1*3225 75172 190.42 on 952.14 6B.12 000052 3 Samsung it MortOoW Key* isfeuraocs 0WV2006 SF 10 0) 07flW009 726.H ooo 000 728.16 16145 42a oa Mia 514a 000053 LouoMfltOtlcaFunAm OM1/2006 SF MoooraweB 21564.15 on 0X0 21564.15 5,12451 iau4 on VOU2 15557a 000064 Coptr 9*018006 SF 10 oo mvm J55S.H w on 3/553,10 09906 22475 ooo 1,12353 272925 kvMimat*m hail |
001 Phoertx Coal Corporation FfrftifcatjWOTMDeariarSl.aiOg Book «internal FYEMorth* December klto HI Thy BtgMg Dkfuef Bribe PfcrfeaB CvYTD AaMtUff -RMAeam tWBnk SfM» Co Dewwon Mi DM l* Mi CM titpfabn TomOii Cot Mr TnntOtt Mr Vtbt My aLtatftect»<1fsaMB4MMri twos F* Catena lOttiaos ST iowonsiaio9 3269 on on 32BJ9 7354 19.16 on 93.10 235.46 000056 OHct Chili* (BarrndMm*) 1M0H2006 SF 10 00 0701/2009 43*a 050 on 43436 97J2 2533 on 12105 31123 000057 FingCibNK KWDB006 SF 10 00 07810009 1.12254 0.00 on 1,12254 25256 6547 on 3i«n 60451 0X058 Suiwng1BeuBariOig)lilK«|«t mum SF 1000 07)3100} 68439 OJJO on 684.90 154.10 3985 on B4K 49055 00OOS8 Bnwemt mvm SF 10 09 0791/2009 23SS 100 on 23922 Hffl as? on «7n 17156 000060 CwnMw «BW006 SF 05 00 0701/2089 3)38909 too on snon 1525JS 3953 on 1429.43 146857 800061 iJptjp/WwiyTjjtrt IMIflOOB SF 05 00 O7/JU2009 159659 on on HS65J 76347 19783 on 96140 73S.1S 000062 M*FMlM*UMinBl 1WH/B006 SF 70 0017/31/8009 48U0 OjOO on 48550 K&3D 2655 an 13365 35235 000063 PintnjttofOflcioUjiisv* 1WW006 a « OS 07/31/2009 4,106.19 0X0 on 4,mis 68966 Z3SXS2 on 1,12920 257659 Q00O6S Ott»Fwrture-U)Ur* MW006 SL WOO 07/3020(8 140059 040 on IjUOJB 303.49 8170 on 385.19 i«isn 000066 MetQMr-OidqWgglgn iiftwas SF 1000 07/31/3009 2S2.M on on 23ZM 5029 1359 on 6352 16832 000067 Wot CM-ChiiBUad 11*10X16 SF 10 00 07810009 232.M on on 232.14 son 1353 on 6352 16832 000068 Otca Strap.laJMb 11/0*2006 SF wooflwiaw 86656 on on Man 187ffl son on 23639 62847 000069 RlnD Cibint jfifctfi OfiM IttlOW SF 10 00 07131/2009 4312 on on 43120 9143 are on mse 31262 000070 MASSOtaMtty Sabot 0WVMO7 a 0300 07/31/WB 26.701.45 on on 26,70145 17,60096 5,191.94 on 22.5S2.90 370855 000072 MCatifiilM KKI1M04 SF 05 00 07/31/2009 5,181*2 on on 5,1*152 4/0453 60454 on smm 172J5 000073 OfcgFumJUt-dMt,r«WvBl Caen* {Tim tOat) 1M1M04 SF 10 00 07/31/2009 IMS on on 2,36263 1/904.11 13751 on 1,14152 122171 000074 Ola Fumftfffar$MMbiy-<l«fc,le atmtM*.* WDM0M SF 1000 077318009 964JS6 on on 96156 40995 5626 on 46621 49w5 WO075 VVMi buifdB IWIfflW SF 10 00 07/31/2099 1*46.49 on on 1546.49 58*73 107.71 on 69244 1,t545S 000077 n*ont%ilipa OWU2006 SF WOO 07(!JV2O09 394379 on on i&m 1,003.11 19554 on 1.1M-K 2,14555 000078 F*abM 0WV2006 SF 05 00 0M3W009 62959 on on 62939 37800 73M on 45in 17849 000079 total*) 09Q1/2006 SF 1O0O 073W0C8 3511.76 on on 3511.76 (Bk 22225 on 1,11177 259959 OQOMO «*m 10B1/2006 SF 1000 07816009 3/noo on on 3,73m 839.48 217*4 on W7.12 Z573« 0000(1 CttdpuMr tar PfioahK Aooourftn 04/01/2006 SF B50»07flttW» 1/564.19 on on ISRtJ 11531 194.15 on 1,10946 554J3 000062 GmpifcrbCCC 6OTH2I06 SF 0500 07731/2009 968.97 on on 96&S7 53253 1044 on 64557 32300 000003 DrwWhrPhiKiii&ijhMfinj IWJ1«0S SF SOD 87/31/2009 M8153 on on 1J6153 VB4J5 21951 on JS» 627.17 000064 Mxttrtm mm* SF 03 00 0741/2009 twos on on is/tcn 12354 1,121« on O460n on 000085 Boitwinctftttt 0001/2006 SF 10 00 0701/2009 47710 on on 477n mis 2752 on 16655 31055 000066 I4drt66*tafc 62Q1ffiOQ6 SF W00 07/3W009 SS13 on on ssm 16077 3215 on 19252 35828 000087 BaACM B2OV2006 SF 10 00 07/310)09 43457 on 050 43457 12661 2552 on 15153 262.14 krmi,m»* Ml PlfH |
001 Phoerfc Coal Corporation MOREIRieBdAsMtRepad-aWBaris R*t»fyw anted Deca*ar31,20Q9 Acamiatsd Depreciation displaygd as of Curort Thru Date. BookstntomaJ FYEMsrfteDttwnber h*e Etf Ttn NWi ftf»*87 r»fcn FlMtaWB CarYTD taunt* ToOjAfloiB NtfEtt* sytfc Co ttmum Dm DM Lb Ml cm Aeatfm T1n<M Ctf Do* Emm TtmOt nm Vital m <M.AMAttt»< fOaMMfrOMO ooam V IMagnr D«k Md Bwkcm OUIWOW SF 10 00 07/3M009 UB894 en on 1J0SBUH W7jS7 MA on 379.43 67951 000091 OdoftDKor OUHC006 SF 1000 0701/2003 SK9S en on w&96 2SU0 4M3 on 306.73 54923 00009? BBctony-Gay 12ff1/2O05 SF 0500 07fl1SXS 23160 ftOO on 293tt win SU5 on 21530 7en 0O0(B3 ftmriMFiiriM 0WDU20OS SF OS0O07SW00! lion on en 1,25309 883.12 W7-S6 on WflMB 2S241 000097 OtbmBmOi 12W2004 SF M 00 0781/2009 58W0 (LOO on SH» 30601 a.42 on 23543 2S9iJ7 000098 Kunwi-W 0WM0Q5 SF 10 00 0731/2099 i moo aoo en *\m ituo 2191 en 187,91 22248 000099 teEiinggiAen oanaoos SF raooojOTaw 2*61 SUB on 24&61 9659 M38 aoo 1W37 135*4 000100 DgMCawn KBOIfflOOS SF 05 00 07G1/2D09 36942 0» en 36M2 28837 on on 332*5 3636 000103 CAD-PngonSatam 02S1C00S SF 03 oo WRvuxa snsos 000 on snw M01* 16U1 on M69J5 on 000118 CvniUir szmsoos SF os oo OTatan 1«002 180 on inojs 600M mis on 7211)0 309X12 000177 0«hr Cw fcr To* am« OW1C005 SF 10 00 07)31/2009 100763) 000 on 10576* 4290S2 S1M5 on 4*47*7 s&m 900106 ViiBPnteclcnSoftm 1WW005 SF 03 00 07M2009 82* BOO on 8Z£6 8266 on on BUS 000 000224 DacMfaiiin MdHO(ifcriU59S MftMIt HPpMrtarHckftria 01(01/2007 5F OJ ) 07/31/3009 1422000 aoo on tamoo 12,M6« 154177 en 15*5843 23057 000226 osmaoos SF osooojffltms i*a aoo on tSSil 7288 ISM on 8879 4782 DOOMS Compute «xINrt«crtlralaItfon BMIflOOl SF B3 93W3WO 40X04305 BIO on 40843.75 2609482 7,841.81 on 34J03J.-45 6807J0 000250 SMtBuMMSMfctUwrCBa* A»Ue*«»[CALt-SPK(1i><2| 0M1QO07 SF 0300 07015009 732* 000 on 732/16 467.96 M2/B an t«J8 122.00 000251 teomSBSOfmUotmUMt oaoiaoo? SF 03 00 07/317009 U9Q200 099 on inzn 1,15128 35239 on miF 30BJ83 owes Smt SunaSmkt UwCSM taMtUenw(CW)-SPK(70l3 OJ01/2O07 SF 0300 W3V2MS 732.46 aoo on 73W6 467.96 142.42 on inn tzzn 9W8S3 Morinr-OoMRMr-Flni 02OUN07 SF OS 00 07/31/2009 1/602,72 an on 172 61437 tesn on 80135 801J7 ma* HRftafminkCMM 02)010097 SF 10 00 07O1/2D09 1*900 900 on 1J5TM70 303.74 3tM an 396.11 1,18852 000255 Twmiul Stoic* IMrttrtfcMB LcMtcfUgsStatkUHr 02010007 SF 03 00 07/31/2X9 6XL0Q en am 636JXJ 40633 mm en 52939 KK01 D0O2S6 Ogrt«7*5Sys»fn**iftoP»i* Hontir-PR-MMMt 021010007 SF OS 00 07312009 10&72 (J00 on ma* «W37 18638 on 80145 80137 000257 0qifc.7«Sj3taii»*tinilP«id MDM>-AaiConMr-Dni 024)1/2007 SF OS 00 0781AOO9 \mn 0.00 an 1882.72 61437 196.98 on 80145 80137 0CO2S8 MtF>nci«onij|itopiKs;pM BMWO07 SF 05 OQ 07/31/2009 20974 u» 003 230*74- 88540 269*7 on 1,15487 1,15187 00055S P*o» Splm -Samunj DCS 100 024)1/2087 SF won oTjUtaw aTTSjso on on sjTia 723J0 22022 on 9(382 243141 AuRM&smctCNI PmS |
001 Phoenk Coal Corporation MflrthlyfiadAswtFteport-QAAPBwil ForfielsctIy9arindtdD6ointo31 l 2009 toaflyDapdifeplapIasrfCumrtThuDato. Boofce Internal FYEM««i*D«en*er Sw at Tbu BrfMi) ohmt« **- *»UWajJ mum CwYTD AcunO-fl TtMAnn FttBook SpNo Q> Omattn D* DH Ub D* cat tofg+in IhnKtt CM Dm, <*» TnrftOit ntir V*m % SMMlMttNo- 18300-80404040 000260 D*k-FranrOffc«-D*a 02OU2007 SF XI00 07OV2009 94970 CUM ooo 94170 19134 $534 on 237.18 71152 oooat Om-FnrtOllEi-iWni oaotaw SF 1000 07QV2BB 94070 OJO aoo 94170 18134 S534 on 237.78 71132 on262 Dem-AP-SuS 02OM007 SF 10 00 OTOtflOOS 94870 on aoo 94970 18134 5534 an 237.18 71132 tarn Dm-WOffict-K* oaoifflOB? 8F »O0O7)31SS09 94870 too aoo 949.70 18134 5534 an 237.18 71132 060264 Da* EmsMtOCcn- Gng 02010007 SF io oo oroiraoos 94370 OLOO aoo 94170 18144 5534 an 237.18 7T132 DOQ265 930) Offic*Owr-0fctSarW»33B 02010907 SF wnwoioos 232.14 aoo aoo 232.1* 4449 1153 an son 174.12 00O266 02O1/8007 ST WOO 07042009 232.14 OuOO ooo 23214 4449 1333 an 3832 174.12 ORBS OfceChw-OiaSfirWDSSSO 08016007 SF 1000 0701*2009 232.14 OHO an 232.14 44.49 H53 an 8302 17*12 000268 OfeChw-ObStoWKUl! 0M1ffl0O7 SF tonoTO&on 23Z.M an on 232.14 4*49 1331 aoo 5832 174.12 1100269 akMam-(Xc*9*wmi ozoiiaou7 SF 1000 071310009 232.14 aoo en 23214 Wfl9 1333 on 5832 174.K 000270 Upop-MHMcEMn 02010007 SF OSnOTOIOIB 1,192.49 030 an l.tffljH 457.12 139.12 an 59024 39325 DOQ271 HP Color FiMr- CF4005* Crtr UwiCHffcrirSiSBiid smaos? SF OSOOOTflffiOOS M13S2 am an 24116 9BS52 29138 on iawo U06.82 000272 Oatt-EMSSlOIett-OUAl 03O1O007 SF 1000 09315009 96*07 aoo on 9S4W 176.75 3023 on 23238 73m 000273 Dtt&MSlatOftei-CawlMhy OSOIfiOO? SF MnOTfllffOM 94879 aoo on 948,70 17333 5534 an 22127 71943 000274 OrktCtai-OffiMSUfVlDUaO 08018007 SF «W87S1/2r« 232.M 00) an 232.14 4256 1333 on 5509 17635 000275 OAnCMrOlkaStrWIOSSn 03OU2007 SF WOO 07/3V2009 232.H aoo on 23Z14 4236 1333 an son 17635 000276 NiCatMl-lJMSIInMr-AP 0S0W007 SF 10 90 07O1C0OJ 82*34 aoo an 93034 TS333 4878 an 202.11 63453 000277 MSC<Ccefun«n OOTOT SF 000 07)318009 905.00 aoo on 9Q5DQ 16532 5279 an 21371 68329 OOW78 DtfOpPlBi7«ir*Noita{CMt«) 09010007 SF 05 00 07/31/2009 iflseoo aoo an iflson sswo 12230 an 47230 57730 000279 «US98M«k«aHx««(5pk) 06010087 SF OS OS 07QI/2QQ9 3,137JE0 aoo an awn i£r&s SXUB an £26105 87135 000202 HAS 90 -MuSple CoBKaiyGmnl lMg»BunoHf42 0X010007 SF 03 00 07010009 3,17470 aoo aoo 8,17*70 I3B73S 61730 on 2*0435 97035 000283 Opln 745 gram** Fkt Part MwioiurAR 07OV2007 SF 05 00 0701009 130433 aoo on 139433 3St» 152.17 an 543.47 76036 0002M Op*i7«9r«fcn«*)RjlP*«i Montor-AP OfTOlftXJ? SF 05 00 07010009 1,30433 OflO on 130433 39130 152.17 an 54347 76036 00028S DMt.HttHup-tainfe 07MO007 SF »00 03131(2009 3729.71 aoo an 172571 SMI 217J9 am 77S40 2JS031 000288 Ola Chars-GwttChtelor al odow WSttUplagforSlamCttt 0M1O007 SF M n 07010009 vmm am an 13*440 24532 18739 an 35331 149039 000287 11OMB07 SF OS 00 0701/2009 i&rw aoo an 2587n S3S97 30238 an 90835 138005 00020B HMm P**»rt WODeSQAWPbBer 42* WOttOO? SF 05 00 9701/2009 67973 aoo on 178971 2.19243 1323,13 an 021535 535*14 *9Mi,wm**mm Np« |
OOlPlwerlxCodCorporafion Fvlhebai]wrmledDmniMr31,!0IB Acaumttiid Depwdafon (flspfeyed as ofCunenl Thu Date. Book= Internal FYEItati-December %>N» Cs Dwawtai D* DM Lit DM CM fcquMm ntMdf Tn»(U r,,ii-, dmD| Co* PftrtaM D*r 0»YIB Mann* IhmQt Dtp MBook Ate Key BtAMtMNg>U3tMMMM0 000911 Ckgarav-LaiiMib- Wood, lie aiAMltatNe-IUOWMOOMO OttlfiOM SF WM878UW8 999*38 (LM OJO 99930 IM» saa QJOO 513 941.09 Lets Hema wig Vauti Mwe« U» 00) W.74M5 UH83W 447SZK DA) 18742054 $ 159314jl NaTotal 345,70,45 6.00 am 3*6,74145 MJBMS 4gszn on 117.420* $15931431 (KJtaMAcdNs.ltlDMHHMI 000312 H»rt(tP«*»rt*315xl«rPB*r 00031B WL*u*E6500L*top(Ort Btaoot) Tip J115JJ1 OMirtAatlto. K30MMMM1 03Q1S009 mvm SF SF IBM orairos OS 00 {7131/5009 DjOB aoo 2,1073 aoo (M0 yo?a Wffl on aoo 1U77 en an 17560 11177 UwHwwwjvaiis an MISS OH) W«» OjSD 28937 on au? I15H51 NKTaW on M«« DUO Wim on 3937 on 28837 *\SMSI 233W60S7 S0&Z377 Oil) «9M9M4 H738U7 W7,S?&S5 an 01&M2& jzwsaz N*GnriT<N M mssiw S06p7.<7 MO ZWfrBro.44 LiJiilMil Z-bSSMBSSSSS I «. «« 167J71A5 on B1&042SS Z.«1KS9S ****»« MINI Flpl |
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002 Sdioate Mining Company McrihfrFMtatffiopat-GMPBHii fate tealyw«WD*»rt>er3t, 2009 AeaiwilstedDeproda&ntSspiayed as of Current Thru Dda Book-Internal FYE MorthDecember 8y»N» Co DMOkR taSK Data DM Qt IBB ignng fefMm ItwKtt EnAQ Cot rmmSM fitx curYio Mcwnfr TMMOgi WtBHI VMM KV fit AM MflQtt MMffl fcttte»««MfcM» fin lifBiBBWPBWr Ua FM Hi r flM i||u Oil WPPwT y. biujajy: i 9ajp<piBjPrtsPjff* n* [wnM tarn in IBJBWBrTflQW JT>PJB B fPBNNB«D| y> Ql nMMgVMw 1 JUrtftWMU wwsw WooreWW AuKUOQBSL ftuuBonc VII ILMBIPf) HUWaQfiK QjtfiWffflPt. MMQB86 gjJWWWC {KjUBjOflft no w no NO NO NO no NO NO NO NO NO NO NO NO NO NO NO NO NO MM 07fliflOQ9 MB 4M ue A« ftfiA ue ua Ma M» ua fins ioa a» ««es «n m m m w m MB MB 6» UO (MB MS &0Q A o«a MO MB M0 m m w m MJ MB B48 MB W m m m BflH MB MB an BM fiflO MB flflfl M9 MB MB MB Ma MB MB MB M> m w m MB Ml M» MB tat M MB m m m m MB an m ftSB m MB MB ftflD MB MB MB BOB m MB MB MB MB MB m MB a* MB AM m MB MG M SB 6M MB m BSB MB MB 0» MB MB MB MB MB m MB MB MB aw MB *m m m m m m m m ABB MB m m MB MB MB BM MB fl£B MB AM MB m MB MB BAB ft» MB MB Ml MB «M MB m m m $-490 flJB MB ftBB ABB lift *a flft*,nflflft Qfflflflfl 1100029 WWW nm ftSB MB 498 MflAM wwwo 006696 MB MB Mmw An QQQQ33 999MQ ft* MB 090W4 MB lPBPaPane 0QQM& BiflO IflB flflB Bffi flflflpB oa w maiaaa LessRw MO w 040 w on OJO am OjOO taoo fMCToto 0J» 000 0J00 w> on MO <uo tua torn GlAlMlAMND OOMW 000QO2 NNMMMMS Ok* tmlm OWW006 OMWOtB SF SF K0O07BVBO9 W00BHSlffll» 1Q90MQ Z9G12I ODD MQ on 009 worn wsta 2J8M0 58333 nan w am 301233 ma I6.B1U7 2097.53 teMiaMMtasm Pipl |
OKSchoateMringCorapffliy UdtNyRad Aart Report-QAAPBcls Farft»iKaly88r«niMD«Mb»31,2009 AcamUated Depr«ciafon displayed as of Cure* Thru Dak Book = Internal FYE Mortis Decwitter klSw a -m Baghfeg Dhtnuf FjiAg nforAfiBK CwYTD AcenOhpf TttolAMPt WBNk SgNo Co Dwjfcn Ml M Ub Ml CM MqNm MaOtt Con Dwf tmm TnmOU 0* v*» m M.A4HI iAeaNo< .«WO-0O«K»« Rjsia 0J» 0J» i2$in 3,19094 mm too 3347n j 931420 UssRem MMjVauiS NelToU 12,961.29 (LOO ooo wniffl 3,19094 790.06 on 3347.00 1001420 61AiMAMND« WSMWMMB O000D3 850 BucMKSCaEMUad* 67XH/2006 SF 05« 07/31/2099 tsjxnoo on on isnon 7non ijson on §25000 JS,750n 00D0M 134 E«ane-8M-mdiSlKwl STOvans sf Nnormeoos «2*U0 009 on «#&n 40,20057 aoton on 48JMO60 on 000005 827 lMmmage-837 07WCOW SF MMOTflttnS 1353U7 aoo ooo 053*37 112,7458 22548.12 on 1353437 aoo 000006 834 Undwonasi-eu 07418006 SF 0300 07fltaw 1X30900 aoo on w&njn 130,424.17 2598443 on i5snsn on 000007 827 Umwanag«-8Z7 0HOU3OC6 SF 93W07B1fi0O9 361565 000 on 3jG15A 2Jtl2j62 70304 on W«« on 000008 Ne»Gm»U9MjjowTUght[)lii*! OMTMOS SF tooo vmvsas WOO 009 on 4,45290 W75J9 259.70 on W&M 3.1W.40 000009 Nm G«i>Ughtm«l4)hk*nh mwm SF WOOOTfllflOOS MSZjBO ooo on 4,48200 tffsn 25079 on 1,3*60 3,116.40 000010 652 Uwranaoe-JSZ (SO/M2006 SF 0309 07/31/3)09 s32soon aoo on msnn 10305155 25J63J9 on 12081945 33H 000011 87! SBIIicklrtiTiu* inetaoE SF osooojwaw 7J9KUXJ on on 7WM W5W0 BTSLOO on 4.12$n wn 000013 C4ntUgMoMrMiiOtlTW.4000N 0MW007 SF Mooomiflooj 4.S7S66 000 on 4j67&6C 896.1? 272.74 on 1,16631 3506.75 OOOQM G«»Lghfen«rMod«l!)4HO0oN 0MHfflM7 SF moo vmvzm 4463« 000 on 4an SW34 26038 an 1,078.72 3X434 000015 rw«rPwnp-SW Mounted 07/OWD07 SF Ktomvm 1X2HUB 000 on russn i«2n sssn on 2wn 8330n 000016 «7? 2002G4CWW eawaom SF 05 00 07/81/2009 ttrfOOW en on 1EV4C<U» 4.10&67 U96jSS on 538133 9,496,67 000017 423 CATD7-ABJ006O2 IWV2907 Sf 10 00 07/31J2009 3f4J6249 ooo on 31436449 36,733.* 18366.97 on 55.19033 25SV76156 000050 67B C*TDtlR-7PZ9l450 124Ma»7 SF 1000 8191/8109 IStTSOO 000 on iwzsn 16604521 89(40835 on 255454.16 1777034 DM051 079 »T OBT T«*-1>jie Tnaor- KPZIB* OW1B008 SF 10 00 07I9V2009 S39/WOO 000 ooo 539n9n 5330330 31,442,19 an 65443* 453*6531 000052 801 EX190QLDKt»cfistow( 95*1/2008 Sf 10 00 07)910009 WWflTJOO on ooo 23807800 172338S3 IS0J97121 on 32339974 2mSw3& 000053 l99Zlte»FtietTHlck 05040008 SF OS 00 0781O009 25,00000 aoo on ssjooon 3,33339 4916.6S on 6M» WS0O1 OOOQM 986 CArD11fi-7f>Z75010 MiWOM SF 10 00 07)310109 l.tSSSdOQ OJBO on 1,16t35aM 47*039 67*208 on 115J0238 W7*7fi 000055 890 KXVOG990GriilirSN 42046 mwmt SF « n oTravsxs 33UB5JN 010 on 338nsn M72J8 197S8J7 on 212412 310JHS75 000056 C7« C*T777F-JBP0«« mum SF woooratfflw ijZ48,7Qaoa aoo aoo lasjoon 31,217,73 7234US on wnon 1,1444952 000057 C719 CAT777F-J(W1«B wfliara SF 10 00 078W009 tajosun aoo on i,24*mn 31.217.73 72341-35 aoo 194359* 1,144j64932 oooo5a 895 U>naSu785-7HalTM*-A1<)079 iwiaw SF looooravara 1,12*394) 000 on 1,132000 njBan 6S|7fln on 84j590n 1W5«n ooooss 894 Komi* PWl&JlkWTn* Hot imvzm Sf 1000 07)31/2099 555,900.00 aoo on sssnon %265n 3M27J0 on 4W250 5M2Wn 000060 C720 C*T777FMiMT*-JBM1BB8 O101/2OW SF 10 00 07/3WQM ittmoo tun on 1,24933400 on 72JS156 on nm m l,17Sn2.« he*<.agin cam Pigi2 |
002$choate Mning Company MorthlyR«8dA>MtR«port-GAAPBaji5 Forte feoljwffffad Dooombor 31,2009 Bo<*= Internal FYEM«tl«OBCWtar irSk fit -am * * -HomnB QnoNdf ftdhB. Marten CfcrTO MggtmtfJSngl ToMAxom Mta* Sytfe 0» OmfHn D* DM u» a* Co* tasMom TnoKM Cat On* Em Tnmtot D*r V*» Kiy GlAMArtltoBlcaMMMMO 000061 85? KarauOflSMOwtoOoBr oiwaxs SF lonwaiaw 233,10100 OiOO aoo 239,19000 aoo 1334750 aoo U0I7SO 225,15250 tt.MNtAt*lto.162»««0«n 1J71M0O4 aoo aoo lyisno* 964S3&52 8007892S aoo 1.789,727* 1 UW607&M LmReiMifwgWtaa N*ToM 1W1M0474 aoo aoo B7KJIH7* 98*9389 mma 010 iTSSjWn 3WW607&S4 GMMtatM»< «00*0MO41 000062 152 K»wlw047SMC!WlK oaawooo SF WOO 07913009 an systM aoo Z6WBJ* aoo 13W.11 aoo 13fl01.11 S 24721.13 Dnar-Miftf 000063 596 Kemiu78S-7HiiilTti*-Atgon Bsman SF 1000 07/3*2009 an OTomo OjOO Liamoo 003 47OSO00 an 47B50n 1j082,150n 000064 897 Um*u7»?HltJTn«i-A10090 BWUS009 SF WWO7AW009 aoo i,i292oaao aoo 1,12MO0j0O aoo 47J0SO00 aoo 47«san \pB,mm 000065 898 Kom*tl7B5-7HBjTiix*-AKI0S3 OW1M08 Sf naamvm aoo 1,09200.00 aoo i,i2#nn aoo W4O90 aoo 37/MUO \tmS6M 000066 SJ5 CATSKKUufcrWOOOW 04W/20K SF muimiim on 1/599J590O0 on 1*9969)J00 WO J6JJS133 aoo susstsa iMms 000067 107 K«MiHD475A4MThKtor 0W1/20O9 SF 10 00 07flMM9 cus 73«A00 OJOO 73410000 000 1223333 an 1223333 721/sss 000069 HC K«miauD47SM*T8dw OOWfflW SF 10 00 on (WIMBj OJOO 90032365 aoo aoo an on 890323J65 6M.Mm(AmN»* *2B0«««41 aoo $309,69519 OJOO MBJ.635J9 aoo siaueaa.77 on 2131530177 $6OTkb.« leaRenwmgVi*** MrtTotti ODD sjwisasas aoo SJWfiM? 000 21SJB3077 on 2W«0J7 $6*76*5.12 BumtfuMt.mattmwo 0OO0T2 PinftMrffeMk-Olto 07AV2006 SF os 08 0mm wn ODD aoo !TO00 yoaoo 58133 an 306133 11,91557 EtppnMftilfttngs «ug«4 l 2H»M«3IM Pipl |
002 SchoatoMMng Company ManHjf Find KSMtRtpcrtGAAP Bun ForfMfce»lywr«WD9MBtw31 t 20O9 AccumiatedDaprecialion display*) asofCwwtltouDats. Book=Internal FYE Mirth-Deeambw SpNo Co tapon IttMi fit Tin ni it m CM OtoOMtf E&fcf AtrAQGUnt OX Dw cvrro TWO* ToMAm MBoct Urt* X* 1 I 1 UttRammngyitai 1 ) HUTOW 1 50GDX» odo mo JJHUX) 3U50OJ0O 58233 90) 30SU3 u#&sr Sffxsn aoo mo * * ff?, IDC flfllBfl 1 ijnusr $ QonlTcM KWSS54 MWjS35jW (MS twzMoia »«2»4» 1J»5,7SS.4« MO 2JMU8SJH $17JB13PI233 , B 1?.733.7K4 1Maa4ttM WtjKS.46 1J15.759.44 ym Z01D3BSJO 1 17jB 13JMZ9J ft«ut<.]M*4SI« ftp* |
002 SchoatB MWng Com pany Monthly Rod At«Raport-QAAP Bute ftfft»isci)ywrBXJBdD9C8i]iber31,2009 Acc«nUaWDepraciaiDn<Espiayrta8dCiiTrt71iniDa!& Book = Internal FYEMartuDwemDer Spto Co tartan fete Mi Ei Hai Ik M QJfflPQ CM Grdr( CM Mar tarn Off CnrYTO Emm tan Off TnwOu roWAccun WtBook ** ntmtlmm.mimi>it<m*mSmmfWiPt*it IkAw SKHYur mm tiaoM Sk lit Aimwci I Sk ffifc Mb Agfutnentewwnai Now KwCWkK » rivttMisgicnta-u»0Miitt||ibJBBllai>tlK. t TtaaunrmNwaqiuml l TvmMiavnuKntagtaiilMMIvlHtystoHlK. it Ti*M«idqiiDMMGtt)Mijrin||lMi#qii«taMtitt r TtoBuliiaiMirfttlMramuadtomirvimndrthnL t Dnwaaatmimt « T«iMMiMsnMigwiiiiriiig«ate«nriwiirti9lii*iloMS. ncad(taMiMi«MM(iI«n|O0iMfos Htfusimm topn,m**nw *mt |
009 Phoenix Coal Processing Ftctd Asset SumniiyRflport For the fecM yon ndtdDunto 31,2009 AocumulitedDBprecialfondspbyasrfCaTenlThmDate Books Internal FYE Month rDecamber hSK Gt Tta Biatfftg OhpoNf &itei Nor Am CtwVTD tanKfT TcnJAoswi NMBgok S*Nd Co DotWbh D* EM III Ut CM AayMkni TnwCst CM Mir TtwOU ov V** T 01 fettAottNe W5MWWWM 000079 PW04 ScnotttaprafenftK-ZHI iwwra SF IQBJBTOIfflOOS 107#Ofi OjOO tun iwaa 3112141 HQsras OflO wma I1J5WH9 oooon www: 900083 n-wi NpOWSomflim* omkmm Q&MMBBttt TOVHMMQ SF MB MO nmvmum flft an BflftifflWi WW WH/88W E320&SS mo ax m m M0 AN ftOO S32JS20 MQ 3ME7J9 M0 OJOO MB MB n\/mm MB MB 460J520.T1 AHA PnfrPtwi tss ftOO adggai AM W-3IB rap HOT UPHU htsKwlJIPiiili-ftwl D&TO007 NO OOWBTmSDOJ MO m uo M0 M0 sso MB MB RAW ooooes OteMmSamfyiiWmftmiq 0WV200S SF loooowaw SWTSfll OjOO HOD 2S7.S1SJ1 WKBjOD ftifVlfl on 10M15J7 162399.14 OBBBft f|Ttf l**m*immtitd aapDot NO W wrtffWcJmj wo M0 m M0 M0 MB MB M0 MB 00OOB7 73-111 NpRMlmnwrtOhir G2Q1&006 Sf moobwswoo) ZB?fl69it MO aoo ar*sifl 925j(S 1W9J38 (LOO !0M*flT 1JBJEI4? wwiM MAittttUfiiMUtfitMAn VHVWCWQ vvfinmi IB MS MS MB MS ana ObSB M0 MO MB Mt MB Mt MB MB MO MB MB 096681 00 09 07fltfi600 nQQQQA &4J| TvlBWtf wTnrWBBHQ NO 0&OPW1JB008 BBB M0 ftoo UO M0 M» M0 MB M3 80600$ W439 pVCfom QTjfljffQftt NO Ml ftOO m flatt MO MO tao M» Mt M0 MB MB MB MS 960699 lajjfi PVC£tA OiMMfQQOf N9 MR Mt ngmQA W-44* uba£I SXDUSBQC OtfflttPQOfi » N9 NO MB wo AM too MO M0 8e66 MB M0 Mt MB ABO MB MB MB Aung MB 996091 &44{ 6B68SS 900696 MtHWHM UBTUUUNPf m MS bbobbtomoob M0 (Mt 0« M0 too MB MS MO MB MB Mt MB MB M0 0.O8 MB 60QO9O J3 jfcl aflBIMftte iwmwwe MS MB oo« wawaai WOOtgaWBM MB (too BAB M0 MO M0 (UBB MB MB M0 MB MB fififl flyM M0 MB Mt 6066% ya Ifflt i inrrkfifMfSiMiB fliAlQDQC. NS woo trovaxa M0 tm M8 M0 em MB MB OVOB AIM QfiOsflQ 79-40 I Lwufci W<#W 1 111 N9 MB MB Mt Ml BOB MO Mt Ml MB MS (MB BLflfl 8J6 MB M0 M0 M0 MB AM A MB ass ftflO agoifli ?Wfl tlbttw Write UW ounce yj «« \mm*mm«wiv*v* OffllCfflS MO wwwavawB MB flflftlflft SHiW fltrrwWpBflojlBf QCBUEDOC W 00 OB BTOIffiOOB Mt M0 Mt MB OflO flflfl MB MB MB KHW N9 00M flfflVMW MB MB M0 fcOB AM M0 MB MB flM QQQlflfi 7|9 tqft fmMJUHAC WVTOWPBP NS woatmnflro 0*00 M0 M0 mm MB W fifiO anil Auguuansoim ftp |
009 Phoenix Coal Processing RttdAwtSumraijfaport Rr*lllc«Iliwr«l(WDwrtb»31,2009 AmmfaodDepeciaSooclsptyefl as of Current Thru Data 8<x* = Internal FYEMwtis Decanter hStt Ert Tin 8#rtf HbmmrV Btf« MsrAgem CarYTO fernM* ToWAOftM MM SytNo Ob Omaigm D* OH Uh OMi Out i tw*ou 0* 0«r Bom Itatffct ow Vita Kay EUCAMtatNa NZOMMNMB C0006* OtoTnto 07AVSI07 SF W00 07fitfflffl 62400) on (US 124000 sa&n 8SU0 on won 4540n 000065 954 WOFttdTM* 0SOW007 SF 0Snfl7OTZ009 20JlMfl9 too 0.00 anon tftm 233*133 on Bi-fwJyy unon 000067 C1S7 C*T01tB7W»1493 I2CV2007 SF »03 07J31ffl!09 iszwn 000 ooo i$on7n i&yraoo «;15U4 on 254J27.83 127J«91T (MOMS C2«1 CATW**Uw*.9IK-«»S62S 016U200B SF W00 C73V3JM IjS5Eu484J» OJOO an 1*5M84n «sjMan 96J62B23 on 26Z27«n in*n737 0OCO69 LECOSutftwAnalpa noism SF KOOCTSIGCW 40321.74 ooo on 40,9217* 68183 287-09 on 3jOStt2 S7J8S242 000070 SaHPiOjK! tw«zw SF I0HO7M2O99 fojjn\fl an on asnia 58197 W*an on 2«7« 32,41036 000074 JTjSyTn* owwow SF MSB 07/310059 *,wa ooo on 4,1B0n 76632 24183 on IflflllS 3,16955 000D7S 32£iVTM 03018007 SF WOO 07/JIOTJ9 mm OJ00 on s,6om 1,026*5 326J2 on 1*357 4247.43 OflODTS 3Ci«T«* 03019007 SF 1000 07331/3009 yam on on E,4S0O 1,177.91 374J9 on 1JE270 4jt7U0 0O0B77 MtoTfftVMwFtowielei 0781/2007 SF 1000 (TOV3XS 3044.78 OJOO on SJ44JI 5tUl 22428 on gain 3*43.78 OOOOffl RaUWlTtttCal IWKSW SF 1000 98310)09 (90000 on ooo «non tosn 48ZSS on «07» s»2n M. tat ft* No WOWWHWO 6.1W,ttU4 a» 6.00 6,116,181.74 895317 36M0627 on 1296.17954 *4j656fl8220 UantmunngV«uM ItetTott 6.116,181.74 400 on 6,116,181.74 895OT27 362,40627 on 1558,17954 t4j85lj00220 OlAMtAcdNo K23MOOM0n 000061 Bug* taring F«d*jf C2W/2007 SF 10 00 07(310009 1,77SjO3M0 000 on UTsnon 34020433 mS41J6 on 443.749.B *W2Mjoi OLMMMCtfe- leaMUMHS wwm aoi on isnon MOMS nasun on 443,74999 JWS12SM1 LenH«m«t»nVa«*J NttToa ItfSnon ooo on i,r?snon wo&a wjsfln on 44374999 S12412SU1 OwlTM 10*759493 S9922B.44 an 11575,17794 158339721 <4sn2n on 22293998 f 9315*796 l«*FtomNiiY*m tat 0*4 T« wsriMsa S»2a44 11375,177.94 15813973 64595269 OOP tssmx (9343X7,96 «agut4,MU«3ini mn |
009 Phoenix Coal Process&ig RadAMtSuRVMyHapat ForftefMiparmfad Dmnto31,2009 Accimulaled Depredation tfspbysd as of CurentTHniDate. BookmtemaL FYE Monti rDecwrtwr SwHo Do Dwftfcn (Mi DM U> Ml Bl|tatag Co* Mpmr MMdfem TnnKM CM MarApwn CnrYTD tan Oh? TimKM ToWtaun MBo* * »pMAwi|*fli I FHmWpw »*»«»> F«i*«IS*oiWT-6WBMii ] tMmftlEM FnrtAaxSumwy I OfclllrMl HI | SkMY«r«m I NaukSKKtMnWE>lSKO».r« I Mjmimw ConMnlOK. Hjw I Kyoto I £ > ilni #p liilniwf lii»iiliii.kiJ>liiiWHLiiiilii(ipiiil I k TUmmtmmhMmmlqDHmttoim. I s 1ta«MHBMi*pai } t. Thiaw<aiMcMtimalUC»MkiataMn«3MWOetaiiiAed] I t ItaanftdvKiMnlaitamMMIiiftairMiiriB. § t HwMiittifcEn.wliiii mi LMtol<rtMi(in|t< tf-wMi (oiiwniuH I r TMaiMkK«M«nla«»lte«dliaMM<i*|McUikla*. I i 1l«aiMHKMilmMHntfei«l»ifta#M* 1 t TtV MM|4fllMf«flMl. I « n»aMiiMii«M1i(«Mte«*iimria)lri»fe/ICE. I Sm(i*lcM*4Mi i )nckidiAMMifHimitVwwlcMnQOQnAJ0fK I SonM*OltaMtaNMtgta|,Spinlto.EilM<n fcfi«4,aa«tiTm Pips |
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007 Old liberty Equipment Compan Find AwtSunwy flaport- GAM* F»h»teaJ)«rind«dD*ambir3i,20!» Accumulated Depredation displayed as of Current Tim Date. Book=imemal FYEMorth=Dec«rt»( hSw Eat Tin BjQlWf DfcpOMf Bafrt MvAODBR CucTtd MnDko/ Trial taw Nat flat SpNo Cg D*>|fM D* OH Lfc 0* Cat taojuUkM Tna»0» Cot o» BaMN TtwOl v*« Kir GL/m*kti*>- ww*im«> 000029 M 1979iHCS19niMVTraa 07/B«aoos SF 1O0OO7fl1ffltt 1000040 on on wan mm 58333 on anon 6S16i7 0M031 147 l998AinD«tnaiOSE«i4l.wlv BttttO* 1W Htarfii BCttOO HpfeOtc Siwel 07010006 SF 10 00 07fi1ffl)09 320X100 MO on s&ooon 8jonn 13S06G on »n&n 22,13334 900032 134 07«V2006 SF lonowtaw 23300003 on on ssonon 6zs»n 1438333 on 77,063,33 17t»1Si7 0OOC33 Ml l9S21tx*RD68BSXTinftfliDuna Tn** 1995KlBdiiEX700HHyihufc 07AV2006 SF iDoooBmftj 5GJWMO on on 2MHM0 5,00000 1,15616 on 6,«0« 1313334 W00IE 846 O7AV20O6 SF 10) 00 07/3V2009 13Q00OD0 000 on UOflOOW 32jOO» 7,58333 en 4005333 8931067 (tcmta 00003? 647 1998 CMC noOlMrTiwt 07010006 SF «00 0781ffll09 2500000 DA) on ssnon oson 1/6833 on 7JVU3 17367 000041 151 1991 Chwj Kodak ttodwact Truck 07/8VJ008 SF looooraiaro 17IOJD0 OOO on 17.5DM0 wsm HH033 an S39SJ3 1ZM4.17 000043 853 1996 KfflWtu BOM O&fiaul Haul l996KanitaO«-f1o»HH»JTnx* 07OT2008 SF M 00 B7aiffl0» 295/000X8 00} on zasnan 73,750n 173833 on 9095033 20W1iJ 000044 854 07M1WM SF 10 00B7S1fflJ09 2Sojno) O00 an Monon B2fl»n M58133 000 77J08J33 172387 090046 857 1996 CD 950F Site I ftuttel TM LmUb 199lC«9S2CFiatEndLnitt 07wa» SF 1000 07SMDS Kuxnso ooo on oojooon ZgyPMjp *#m on UtftM 5533334 000047 858 07/0 WOOS SF 1OO0O7flWOO9 sojxnoo ooo on 29OQ0OXQ 72WM0 KJ166S on 8041646 20OSB334 000049 059 2004 Fort FSOSupjr Duly FWttd TfljCK or/ovsooB SF 10 00 07010009 22/10000 OjOO on zznon 5*»n 138333 on 078333 «316£7 000049 864 19S3HtKttEXTnt*t«lfcEEavMat 07BMD06 SF lOnOTfflfflOB 150,00000 ooo on wonan 37,500X81 0750» on 4S£0n iiRTsan 000051 iHCC0f»5»TWU(»lirTn4 97A1S906 SF w oo owvaxs 800003 ooo on sooaoo zxvon 466.66 on 2,46066 533334 000054 861 iSKNSSANUSIOQOEnckwdVin Tin* OinrlWioEqHpirart OTtrfflW SF 1000 071310009 253009} ooo on 25,00000 &250n 1,45033 on 7.7083J 17J91.67 000057 07O1/3D6 SF 1000 07131/20(8 tsosmo ooo on TOsson 196JSS230 45*458 on 242,427X18 5433ZZJ2 000058 849 W8CMbr992CRiciiirThO LdSflx CATCW.DBW 07maa SF ID 00 S7731S009 i22jomm ooo on fzjooan losoan 7,1KuBt on 37£t066 8438334 000063 871 ««tt006 SF 1000 071310009 1371090} ooo on WJOOffl sijDosn 100833 on 3904333 9075667 M0064 173 1986 MX* Lute Tuck 04OT2007 SF wtooraifflXB 42OK00 on on 42joaon 7«on ysooo on 9«0fl0 32foan 000065 874 a00lFMF25O 0WM07 SF 10 00 11910909 20,71000 ooo on 20710W oraus 129U8 on 4(83233 B377i7 O00OE6 875 CAT9S2CWMI Loader 0447U2OQ7 SF 1000 07/3WD09 143X0000 ooo on usjooon 25/025XXI 6341.56 an 3335066 t««334 000057 I75A 99?CR(KliBud«ettarCATni2CWhtcJ Lo«J»fjfASAae»«l osioraw SF 0910 07/318039 13,70000 on on 13,70m %205J3 81271 on 30IO64 1068136 SOtXStk 83a MO 9041 aiw MO on en on Ajgn on 086069 tTKflllia* Tiii BaAUfiBOa NO 09 W WBlfflOOJ on on on on on on m on 000 QflOflTO VtAfe-tnkS (lifM/Mffi MB W Wl VJ1UIIUJW 9M on on on on on m on on ki**,m**am p*ni |
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OtffOWIJbertyEqu|«wntCompan Rod Ao« Sumwy RaprtQMP Fwth6fccalyMir««WDeca*«r 31,2009 Accumulated DsntocSafin dsptersd as of Currwrt Tim Date. Dooka Internal FYEMortisOflcsnter SpNs Ce DNation ktSw DUi DM E* 1*1 Bqtarfag Cot MriNm npmd TiiwMJU Eitff nkbtnOOliil Our QrYTD TroOut nwAmn ftp Nttfeok Vita Kur Gl*MA*N» « WftMOftftft HWU Mil WHO lnvT1|nill«fnn 060198 A30 Klflitfmtfi 0EIO1CQ04 <MI1HI1M OTlBWT 19D1CTBH fflfcliSOOS otounfis augeangc wajwiwwrte NO NO NO NO NO MB NS NO NO NO NB aowsrewflat MO m m ASS ft MM ft ftflft «S3 a mo AW Oft MB ft MB Oft ft ft Oft ft too ft 0ft Oft Oft ft ft Oft SflB ft AM ft ft Oft ft ft Oft ft Oft Am ft ft M0 ft 0ft ft M0 MO ft ft Oft ft Oft ft Oft «« BM ft ftflft Oft ft ft ft ft Oft MO ft Oft Oft MO ft fids a «« mo ft 0ft 9ft ft (ft ft Oft Oft Oft Oft Oft M» ft ft ft ft ft MO ft AM 0000 Bfl&flBQO MOO 0TOVS99 WlM VfNIHUKI.P (Q0M3 VwkMftN 000116 Mi fftf taMftfettAH Oft ftflQ SIMM And* HftMO-OOftft Lessltanttngvaues 5TO*a« 0.00 ft smm*> \/sajim Wtta 0ft 1,758,587.9) I4WJ72M Net Tom 57B.«JM 000 Oft Wrssom i&yna 336J1&22 Oft 1,760*87.90 $4*14,772.10 M.tatftatNo*NSM»««ft 000059 3005 Fad T/uA 000061 2005 Fort Tmok 000052 WKftrtTta* GAtartAMNe- N2U«««« 07OT2006 OftlflSOB 07812006 SF SF SF 05 00 OT/3VaO09 05 00 oramoo9 05 00 TOMB 258900 202Dti» Oft Oft Oft Oft Oft Oft 25569ft mjtsoo 2020100 IJ,«4ft 9«7ft tnwoso S.MWI atswi M56J0 Oft Oft Oft I6JB4321 IIJHTJt S 103*5,79 7.197ft 774172 UttHemiMgVitM BSJSSft Oft Oft eftjft 32ft2$0 70Sft Oft 4Sf78ft $253550 NefTow SSS6Sft Oft Oft GSSKft 32J6250 rmx Oft 40JS7&40 (25286.50 8rmdT«W 5.84M2SO0 Oft Oft 5M,«5« IW55.15 3(4,011.12 0» WJSSft 14JW9G0.7O ht«4,«U4am twi |
007 Old liberty Eqdpmert Corapan Bad Ao* SumwyRifat-GMP For tMhcalywr ended D«8ntw31,2009 AcoriiiatedDeptBciatkxidBplayBdasofCiiiTlwD 8wk=internal FYE Mat** December SytNo Ce Oaofe* HSR Mi N It M CM EaA| PHortoam © rYTO tanBhpf ToWtaw Tta»OK Out Nttftx* Vkka *f MGMTott SW/CSfll w» w» W1.«5J» ) i UEMS.*, 3Mfll.« OflO iyi«6» itapuUiimftn 001 WPt IBWWMWHI)! rjnfcfciUMiUm SwiY«r now Mi* Sk Kl MgMm < Sk US fm MfdCbmflf Commdc Nw KmCofeE fc tMamnaumMtvpMMiplilMlwlon. t T«sKMiMciMlmalMCnsiMc*uHg9l)1wWCRSta(riieabM>v r THta«ntoi*a*<mtHitinM*itytmyNM<t«i, k IniiilwiwifWiiaiTiiliiltinBil&iiiyNiiiii. Sn«*«cMMHB >icMft *m4i Im mm in Mowing DBKfEion; SortMgrGl*>atodtN9(>ft*«ttttli),S)«niN&&an*» |
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017 Renfro Equipment Far1haftnlya««KMD«o«iiMr31 r 2008 Accunulaled Depreciation displayed ss of Curort Thw Data Book* Internal FYE Mo* Decanter S»M> Co taatiai DM Bl Tin 1* Mi Oeri gnf MM TimQlt cat MvMeoa »*r CWYTB rxrai TgtttoM Mtodk Kw RBoAtauvnvt IMbk Matty !%mam9mwv-(»AP Bisk SotmflipHK FoM Amm Suwwf MurtYMT-nont MakSK IHMnmtl&C mm MmUMCOMMOit-Noai OyMc x Attpnatt0Mtf|jimi*MiiftitcidudKffcliMCnft9Poii It M«i*Mld#tM t Ti»MHinaMcMtaalUC«Mki*uMtalDl«M/»fiignic*]Mm c MiAlipettuhatainfclMbrlaqr«ut)MlM. faMPAetetta* mA Amk tw nut In toioHing oonAisnc SaiMlir(M«M«aiNp(M«HoM),9»aMflABMiw |
014 C 4 RCoal Company For1htpH{odandBdJulr31,an9 Book=Internal FYE Monti» December taSw Eft THu BltJaAj Dtemtf Mrtam CnrYID AenBDhpf TgUAwn NtfBa* Ob Daopon Ml DH l* D* cm AcqjHfcM HwOtf CM Pur GpKM TM#Qf 04H Vtt» fey GMatftatNc HZ)K»»«W0 000005 «s 1979 Cat 9688 RuttwThUj*! 50W3S57/50W740 OiDiane SF 1000 07(31/2009 36,008 JOE) 0.00 0.00 30,00000 1»00 1,75000 OjOO SJOOOjOO Z7JX0.00 000006 «J2 19KCU777AOI float HaulTtuek $4*01715 0W1J20OB SF 10 CO 07fll/OT8 45,0COJ» M8 on 4S/WM0 WRflO ?525J>0 000 4S»i» 405COJX 000007 403 1M4CH777*MIH(wl(*UTn«* 14*01414 OMV2006 SF 10 00 07131)5009 4OBX.00 CLflO OjOO 40,00000 1JKJS? 2£&33 <wo 4jooaoo 36,00000 ooooos 401 iwCatTTTAOfftsMHiilTMk MA09B43 OMIfiOW (W 01 04 07010009 3SjBBM0 OHO OOO sooaoo 1,43121 12,152.70) ooo 13JJ11.1t nBjg 000009 405 moCamAOiiRwiftiiTnK* oafrifflos FW 01 9+ 07J3KB8 WjOOOJM IM» am vioaoo 41667 37222 OJ10 jfBSUS 6,111.11 OBBtMfi 0OW11 4* 4*6 warn MHinraii 06OTS008 SF SF 670000 Ml OjOO MB (LOO «7UflO timm ymx 4Q 3£37,S0 0JK IflMM Wsaoo CfJnRWW 60J7SOJOO 19MD(*H«hC45n.flU88wt»Dri 1000 033112009 731615 000012 IS7»J«hj 45 ftei SOOTH ftutt* Con CwMr 12858 dmibow SF 10 00 07f3lJ2009 4Ateooo on ClOO 4SflBU10 13SO0 a6a« wo 4J50OJX 41*30000 000013 407 i!»SMadiRG86STT*nolgrfiUibftA FirtT<uek*BH179«FAO»S4I OBfllfflOUB SF (0 00 07flW0B ZljDQOJQQ 0.00 D.00 MJXBLOO 17500 1.22S.W 000 2,100.00 IWftOO 000014 410 iWHidiTandtmnMTiwk oboibom SF 10 00 0WWOJ8 SJJOOJX) ow 0J» 5,00000 20633 2S1JS6 OJOO K/$9$ 4J300J1I 000015 BL Am 40E Atctlfe Kjs«XW13?V2tai6X6Taii*ni m*rTMk o&qi&dob SF 10 oo mvm 5/8)09 ooo two sjmoo 2*33 291i6 0J» m,n 4k50U1 789,50000 0» 600 75JV50O00 32*4SJ2 51MB 000 twss »69Z,1SCU)S Imfl* mongViiiM i NMToUl 7B3J9DJX00 em 100 7&3$0OJ3D 32J54M2 &W04-I3 on 91,34935 $182,130(05 SMiMtoaNs ««3nWXM0OM1 090017 412 UnaCMffiSCmtoTnick 0291900!) SF 10 (0 0W1S009 oxoo 131,729.17 an nusu OjOO 650M5 0J» 6S8S.45 $125,142.72 000040 466 1flOMtehC45ia.Ba9hol.Dii 731618 a09BEMU> owiraos SF toooominom ooo «o,iaa 0430 140,121.39 0J» 233535 MO 2J35J5 1376« hipt<,mi*vm P*2 |
014 Cifl Coal Company Fortho pariodttiM July 81,2009 Book» Internal FYEMorthsOiovmber Sjftfe Co CImQi nsw at Tin DM t* Ml hgtatq; **-» Mxarif Ttw*ftl DuRQ CM PHorAoosi CUrYTO Ml GMMV Acuity TlinKM T«M*wn Mr NtfBot GL*MIMtN»> HMMMMW1 tosAMioimgVttws on m/sw 00) Z71ISOS5 000 *»!» ono WJiw ? S23Z8J6 Net Tow u» was am zrusass WO M2UW OOO Mztn tz&sam MrfTM tlM ffaMHiMM YfllMIt TB3J5QDI30 mjas MQ IjOHHLM 32JSRB2 S7/B&J3 DA) KiwriJS I9B,078u81 NrtMMToU . MB 1JBB38t5t . ,, rmmj awx ,, , 0j» t*mi.m»wm PqU |
014C4RCoalCompany UortNyRndtestRsport-QAAPBads For the period enfcdJiiy 31,2009 Botf=Memal FYE Morth Oeoertftw S*No Co Dm*** OK Ml n in Oat tetfflaa Tw*OU CM Our lrnw TtimQit IUHIMUIH Vita K nnwrtWl* M»««rFma«ti*S«w«j-eMP9isit fcuwtwt fuMMMSumWY tKUkSK»iAiaa«ttS«fn:Yta t: HMnwMmmnjiMmMHiiniiiiitiiliiiirniliiiiBuliiijMii c TttaMwMnfeoM, m: T» HMfi <ainci*ximiabl**lijiqUiiH*mW anto. i. TlaaMiwMMtMfeMigtotentoMtagKta. I. ThfMKwilimlml r Tl«iaNnaMMt>MtiiMm*i»iiiMflBftal>/eE Group: MM AIMS nciidi AmttliiiiMHNtjltfltmlftWi Som* 6n.AMtAcaf«)(wii>t(gM4.5»iwiNaEttnts |
004 Crtteoden Courty Coal UonWj FtelAwetSummBy- GAAP Basis For titfccsljfesrsniMDtosfltierSI, 2009 Accumulated DsptBoatJon disptayad as of Current Tlmi Date. Book=Wsfiial FYEMorth=Decemb« BjJINQ Qj OWtq*PI hS* H l*ra ftstag CON tffUL HBOMdf * cnvg NorfcoM CurYTD AoanOV £*mi TiMfrOtt TMtawi MBook Via Kir QA JrtksilkimlSSaMA&IAM 0MWIID7 SF 05B1OTT SF W 00 07HtM09 10 00 07M2009 MJMO MlOuM m aoo am 0J90 97U7 1,50147 340M 000 SBJSt 003 1411.75 ZAZM5 000003 LyiPinspiioBit&resinJoni M41US MfETS Lest Rowing Vafats 144&00 OflO 000 M440M 147434 IS566 OSS W»* S 1140100 NetTom 1444000 aoo ouo 1444001 W7&34 96SJ6 CO] JS»M $ H40U0 QmtfM LataMM*1M» 1444000 100 040 14440.00 WttM tssa aoo M3M0 $11501.00 MSnnrfToM ummo I aoo 14,84085 MW. «sa om in 32Xai H1J010O fc«*4,MI««aw rlQfti |
(XMCrittendenCotffyCoal ferity Rnd AmtSumtty-6MP Bail Hi Iwliutpii witlml Dwsrtur 31,2009 AccuTiulatadDepreda6OT(fi$pla}35afC«rTImi[ Book* Internal FYE Mb* December SyiHo Co OmoMw ItSw ED tn m m m OtyMf tejttbni Ti«»at * -EnmQ Cat Met/tern D«r CttrYTO Tm<U Teutons I* MBk* Starts: ma MuM$tt«IMmiK»l$Kl7t:Yta ferQte ft DnliMMCMBi<HpMtt t 1teMMn«ciilailaitaBMMI;lmr)P«»nta. in TfciiMtiJMinwmEdMidMligfttBtfylpwiWHMBii. fin«Bg*|QMr Graf .Mm A«ii ildldlWMIVIflHllWHOlMQUmullK. Saw* Hi MM tacH»NiswUaUA 9y*n*.E*<**i |
5
Schedule 2.1(b)(ti) 5Phoenix Coat Surface and Coal Leases Mine 5lessee/Assignee Lessor Type Date Comments and Recording Info Star Evergreen Mineral Co., inc. Peabody Development Company, LLC & Peabody Coal Company, LLC Surface Mining Rights 21-Nov-05 Star Evergreen Mineral Co., Inc. Peabody Development Company, LLC & Peabody Coal Company, LLC Partial Assignment of Mining Rights 30-Sep-OS Star Evergreen Mineral Co., Inc. Peabody Coal Company, LLC/Terteling Partial Assignment & Assumption of Leasehold Estate 30-Sep-05 Recorded at DB 514/531 Star Evergreen Mineral Co., Inc. Peabody Development Company, LLC/Terteling Partial Assignment & Assumption of Leasehold Estate 3Q-Sep-05 Recorded at DB 514/506 Vogue North Evergreen Mineral Co., Inc. Peabody Development Company, LLC & Peabody Coal Company, LLC Surface Mining Rights 21-NOV-05 Vogue North Evergreen Mineral Co., inc. Peabody Coal Company, LLC/Terteling Partial Assignment & Assumption of Leasehold Estate 30-Sep-05 Vogue North Evergreen Mineral Co., inc. Peabody Coal Company, LLC/Terteling Partial Assignment & Assumption of Leasehold Estate 3Q-Sep-05 Vogue North Evergreen Mineral Co., inc. Peabody Coal Company, LLC Surface Mining Rights 21-Nov-GS River Queen Evergreen Mineral Co., inc. Peabody Development Company, LLC & Peabody Coal Company, LLC Grant of Surface Mining Rights 21-Nov~05 Brier Creek Evergreen Mineral Co., . inc. Peabody Development Company, LLC & Peabody Coal Company, LLC Easement Agreement 21-Nov-OS Brier Creek Evergreen Mineral Co., Inc. Peabody Development Company, LLC Martha F. Rogers, widow; Martha R. Poulos & George Poufos, her husband; T.G. Rogers, Jr. & Jean M. Rogers, his wife; J.l. Rogers, Ml & Gloria Rogers, his wife; Partial Assignment and Assumption of Leasehold Estate 21-Nov-OS Rogers/Cherry Hill Evergreen Mineral Co., Inc. Sue R. Grable & William J. GrabEe, her husband Coai Mining Lease 30-Nov-65 Recorded at DB 252/343 Rogers/Cherry Hill Evergreen Mineral Co., Inc. Rogers Brothers Coai Mining Lease (amendment) 26-Oct~02 No confirmation on recording status Rogers/Cherry Hill Evergreen Mineral Co., Inc. Peabody Development Company, LLC Partial Assignment & Assumption of Leasehold Estate 21-NQV-G5 Sacramento (McLean) Evergreen Mineral Co., , Inc. Richard Reno & ieanette Reno, husband and wife Coal Mining Lease 2-Feb-96 Recorded at D8 135/4 Howard H. Revlett, Jr. & Elaine J. Reviett, h&w; Dora R. Harris; Larry E. Stewart & Sacramento (McLean) Evergreen Mineral Co., . inc. Virginia R, Stewart, h&w; Martha fay R. Anderson Coal Mining Lease 1-Jui~96 Sacramento (McLean) Evergreen Mineral Co., Inc. R. Douglas Wood and Sandra B. Wood, h&w James A. Wells and Connie Sue Wetis, his wife (99 Shamrock Dr., Madisonviiie, Coal Mining Lease l-Jut-96 Memos not recorded to keep private this leasehold area, until Thompson Creek Evergreen Mineral Co., , Inc. KY 42431) James A. Welis and Connie Sue Welis, his wife (99 Shamrock Dr., Madisonviiie, Surface & Coat 20-May-09 ready for permitting Memos not recorded to keep private this leasehold area, until Thompson Creek Evergreen Mineral Co., . Inc. KY 42431) Surface only 20-May-09 ready for permitting Thompson Creek Renfro Equipment Inc. Kevin Huh (3389 Shady Grove Rd., Clarksviite, TN 37043; Surface & mineral 26~Aug-05 Recorded at DB 517/29 Memos not recorded to keep private this leasehold area, until Thompson Creek Renfro Equipment Inc. Captain and Dana Inc. (515 Gishton Rd., Central City, KY 42330) Sublease Agreement to surface mine coal 21-Aug-07 ready for permitting Memos not recorded to keep private this leasehold area, until Thompson Creek Renfro Equipment inc. Captain and Dana Inc. (S15 Gishton Rd., Central City, KY 42330) Mineral lease agreement 2i-Aug-07 ready for permitting Memos not recorded to keep private this leasehold area, until ready for permitting; currently amending to include surface mineable coai; Lessors still have amendment documents in Covington Bandy Evergreen Mineral Co., , inc. Howard Covington, Mary Covington, Morris Bandy, and Carolyn Bandy Coal Lease Agreement (Underground only) 23-Jun-Q9 review at attorneys office Briar Hill/Radio Hili Evergreen Mineral Co., inc. Taimage G. Rogers et ai. (aka Rogers Bros) Surface Coal Lease 4-Dec-47 Briar Hill/Radio Hill Evergreen Mineral Co., , inc. J.L. Rogers Jr. etal. {aka Rogers Bros) Supplemental tease 8-Jan-57 Briar Hilt/Radio Hil) Evergreen Mineral Co., ,lnc. Taimage G. Rogers Jr. et al. (aka Rogers Bros) Extension of Lease 6-Dec-62 Briar Hill/Radio Hii Evergreen Mineral Co., , Inc. Martha F. Rogers, etal (aka Rogers Bros) Supplemental Lease l-Jan-66 Briar Hill/Radio Hill Evergreen Mineral Co., , Inc. Sentry Royalty Company Strip Coal Mining Lease 20-Oct-67 Short Form of Lease recorded at DB 261/22S Briar Hill/Radio Hili Evergreen Mineral Co., , Inc. AMAX Inc. release to Rogers Bros. Partial Release of Coal Mining Lease 23-Sep-86 Briar Hill/Radio Hil Evergreen Mineral Co., ,lnc. AMAX inc. assigns to Meadowlark, inc. Assignment & Assumption Agreement 27-Aug-87 Briar Hill/Radio Hil Evergreen Mineral Co., ,inc. Meadowiark, Inc. Surface & Mineral Lease Agreement 16-Nov-99 Memo recorded at DB 481/32 Briar Hill/Radio Hill Evergreen Mineral Co., , inc. Lynx, Inc. Assignment & Sublease Agreement 22~Jan-£l Briar Hill/Radio Hili Evergreen Mineral Co., , Inc. Meadowiark, Inc. Corrected Surface & Mineral Lease Agreement 5-Apr-01 Memo is recorded at DB 482/213 Briar Hiit/Radio Hili Evergreen Mineral Co., ,lnc. Meadowlark, Inc. Corrected Assignment & Sublease Agreement ll-Apr-01 Memo is recorded at DB 482/213 Briar Hill/Radio Hil! Evergreen Mineral Co., , inc. Meadowiark, inc. Corrected Memorandum of Assignment & Sublease Agreement 12-Apr-01 Not recorded; Notarized and copy in fife, but no prepared by Briar Hill/Radio Hili Evergreen Mineral Co., , inc. Lynx, Inc. Amendment to Assignment and Sublease Agreement I0~Qct-Gl section on this document Briar Hill/Radio Hili Evergreen Mineral Co., , Inc. Rogers Brothers Settlement St Access Agreement l~Sep-Gl Briar Hilt/Radio Hil; Evergreen Mineral Co., , inc. Meadowiark, Inc. Amendment No. 1 to Surface and Mineral Lease Agreement l-Jan-03 Not recorded; incomplete and only have faxed copy Briar Hill/Radio Hill Evergreen Mineral Co., ,lnc. Rogers Brothers Notice of Extension of Lease 25-Feb-04 Briar Hill/431 Evergreen Mineral Co., , Inc. Crescent Coal Company; Justin Potter & Vaiera Blatr Potter, his wife Royalty Agreement 3Q-Jul-55 In house; not sure if recorded Briar Hill/431 Evergreen Mineral Co., .Inc. Potter Grandchildren, LL.C. Modification of Agreement 4-Apr-01 This document was listed as a reference only; this option was never exercised within the given time period and therefore, Briar Htil/431 Evergreen Mineral Co., , Inc. Lexington Coal Company, LLC & its wholly owned subsidiary, LLC Kentucky, LLC Option for Surface and Mineral Lease and Sublease Agreement 7-Jun-06 lease is not valid. See valid lease below. Briar Hill/431 Evergreen Mineral Co., , inc. Lexington Coal Company, LLC & its wholiy owned subsidiary, LLC Kentucky, LLC William Thomas Dockins, individually, and as Sole Trustee f/b/o Karen Estelte Surface & Mineral Lease & Sublease Agreement 30-Jun-09 Not recorded; no prepared by section Back in Black Evergreen Mineral Co., , inc. Dockins; and Brenda Dockins, his wife Coal Mining Lease (coai only; no surface ownership) 29-Jun~Q9 Memos fully executed and will be recorded soon. Back In Black Evergreen Mineral Co., ,lnc. Florence Jane McPherson, and Virgil McPherson, her husbanc Coal Mining Lease (coal only; no surface ownership) 29-Jun~09 Memos fully executed and will be recorded soon. Back in Black Evergre |
Mine Lessee/Assigneep Lessor Type Date Comments and Recording info Re-leasing after preliminary title showed Lessors had partial coal ownership in leased tracts; will record once new Geibel Evergreen Mineral Co., Inc. Lisa f-airchild & John Fairchild Hi (297 Baggett Ln., Greenville, KY 42345} Surface ONLY 5-Mar-09 documents are executed. H.C. Epley and Betty Epley, h&w James K. Putman & tlene A. Putman, Trustees of Geibel Evergreen Mineral Co., inc. the Putman Family Trust, Linnie Putman (widow) James K. Putman and ilene A. Putman, Trustees of the Putman Family Trust; Surfaces Minerals 7~Nov-05 Geibel Evergreen Mineral Co., inc. Unnie Putman; Sondra Epiey; Kevin Epley & Melissa Epley, his wife James K. Putman and flene A. Putman, Trustees of the Putman Family Trust dayed 09/08/1999; Linnie E. Putman, a widow; Sondra C. Epley, a single woman; Amendment/Term Extension and Renewal Agreement (#1) 18-Jan-Q8 Ail documents are fully executed an in-house; however, the orignal lease and 1st amendment were poorly executed by Midsouth Energy; likewise, we do not want to disclose these Geibel Evergreen Mineral Co., inc. Kevin Epley & Melissa Epiey, his wife Amendment to Lease (#2) l~Jul~09 royalty terms to the public and no memo was executed w/ Geibel Evergreen Mineral Co., Inc. Midsouth Energy, Inc. Assignment of Coal Lease 2G~iui-09 Lessors and Midsouth Energy KO Phoenix Coal Corporation Claude W. Lee & Alicetine Lee, his wife Surface & Minerals 7-Aug-09 Memo recorded at DB 543/956 KO phoenix Coat Corporation Tom Eubanks (2378 S.R. 189 South, Greenville, KY 42345; Surface & Minerals 31-May~07 pjeetj to execute memos of lease on these two leases and have them recorded. Al! other leases, with the exception of Simms KO Phoenix Coat Corporation Jeffrey L. Eubanks (196 Luzeme-Depoy Rd., Greenville, KY 42345) Donald R. Lear & Judy Lear, his wife (2615 Greens Chapel Rd., White Plains, KY Surface & Minerals 31-May-Q7 tease, have had memos recorded. KO Phoenix Coal Corporation 42464) (l/4th interest) Ella J. Winn & Donald Wtnn, her husband (11734 State Route 175 South, Surface & Minerals 12-Sep-£5 KO Phoenix Coal Corporation Greenville, KY 42345) (l/8th interest) Martha L Blass (11650 State Route 175 South, Greenville, KY 42345} (l/8th Surface & Minerals 12-Sep-05 KO phoenix Coal Corporation interest) Fiowel (William R.) King (12055 State Route 175 South, Greenvilie, KY 42345) Surface & Minerals 12-Sep-05 KO Phoenix Coal Corporation (l/8th interest) Surfaces Minerals 12~5ep-05 KO Phoenix Coal Corporation Ruby M. Smith (4899 State Route 70 E, Drakesboro, KY 42337) (l/8th interest) William L Lear & Sadie L. Lear, his wife (5993 Hatchett Mill, Spottsvilfe, KY Surface & Minerals 12~Sep-05 KO Phoenix Coai Corporation 42458} (l/Sth interest) Herbert W. Lear & Ilene L Lear, his wife (11903 State Route 175 South, Surface & Minerals 12-5ep-05 KO Phoenix Coal Corporation Greenville, KY 42345) (l/8th interest) Surface & Minerals 2Q~Aug-G5 Need to execute memo of lease and have it recorded. All other leases, with the exception of Eubanks leases, have had memos KO Phoenix Coal Corporation Jon Simms & Crystal Simms (565 Kennedy Rd., Greenville, KY 42345) Surface & Minerals 9-Oct-06 recorded. KO Phoenix Coal Corporation Loren R. Lee & Kay Lee, his wife (193 Stoneybrook Dr., Greenwood, IN 46142) Surfaces Minerals 6-Mar~06 KO Phoenix Coal Corporation Donald Lee & Ellen Lee, his wife (929 S. 250 W., Hebron, IN 46341 Surface & Minerals 30-Aug-05 Geibel Lumber Co., Lydia Geibel by Jon Geibel, POA and Jon Geibel, Agent for the Geibel Renfro Equipment inc. Geibel Family (P.O. Box 200, Greenville, KY 42345) Geibel Lumber Co., James Tardio, Executor of the Estate of Lydia Geibel, and Jor Surface t 24-Aug-05 Lease recorded at DB 517/35 Amends 08/24/2005 lease; no prepared by section; not Geibel Renfro Equipment Inc. Geibel, Agent for the Geibel Family {P.O. Box 200, Greenville, KY 42345) Richard T. Williams & Tonya L Williams, his wife (631 Pallet Mill Rd., Greenville, Amendment to Lease/Sublease Agreement ll-Nov-08 recorded Geibel Renfro Equipment Inc. KY 42345} Gerald A. tiles & Judith Ann Liles, his wife (69 Shady Acres Ln., Greenville, KY Surface 25~Jun~G7 One document; only have a copy in lease file and believed to Geibel Renfro Equipment Inc. 42345) Surface 3-Aug-06 be recorded but no confirmation; no prepared by section on Geibel Renfro Equipment inc. Joseph P. Liles (3111 4th St., Apt. 320, Santa Monica, CA 90405! Gerald A. Liles & Judith Ann Sites, his wife (69 Shady Acres Ln., Greenville, KY Surface 3~Aug-06 this document; One document; only have a copy in lease file and believed to Geibel Renfro Equipment inc. 42345) Surface & Minerals 13-Sep-06 be recorded but no confirmation; no prepared by section on Geibel Renfro Equipment Inc. Joseph P. Liles (31114th St., Apt. 320, Santa Monica, CA 90405; Surface & Minerals 13-Sep-06 this document; No prepared by section, but believed to be recorded; Geibel Renfro Equipment Inc. James H. Edwards (1266 S.R. 831, Greenville, KY 42345} Surface 7-Sep-06 however, no confirmation on recording No prepared by section, but believed to be recorded; Jessup Renfro Equipment Inc. Terry Adkins (737 Blame St., Sand Coulee, MT 59472) Surface & Minerals 2-Dec-05 however, no confirmation on recording No prepared by section, but believed to be recorded; Jessup Renfro Equipment Inc. Hilltop Haven, Inc. (P.O. Box 726, Burkesville, KY 42717} (Alma Jessup-President) Surface and Minerals 30-May-01 however, no confirmation on recording Short Form Memo of Lease recorded at DB 543/396; original lease was 38 pgs and incorrectly leased Anna Lorainne Cundiff as Lessor (should have been George Rudy Cundiff & wf); Memo corrected this and reaffirmed leasehold interest in R & L Winn Back in Black R&L Winn, inc. Anna Loraine Cundiff, an individual Surface and Coal 28-Feb-Q8 (Purvis Tract-92 ac) Recorded at DB 521/74 & re-recorded at DB 521/237 (Jamison Back in Black R&L Winn, Inc. Anna Loraine Cundiff, an individual Surface and Coai 7-Jun-06 Tract-144.093 ac} Recorded at DB 521/68 & re-recorded at DB 521/227 Back in Black R&L Wtnn, Inc. Anna Loraine Cundiff, an individual Surface Lease only 7~Jun-06 (Kirkpatrtck/Beech Creek Tract-103 ac) Lease in-house but no confirmation available on recording Back in Black R&L Winn, Inc. Kirkpatrick-Beech Creek Mining Surface and Coal 10-Sep-01 status (Kirkpatrick/Beech Creek Tract-103 ac) Back in Black R&l Wtnn, Inc. C&R Coal Company, inc. Sublease Agreement 20-Oct-06 In house document and was not recorded Back in Black R&L Winn, Inc. Tom McDonald Heirs etal. Surface & Coal (reclamation only) 15-Apr~G3 Back in Black R&L Winn, Inc. Tom McDonald Heirs etal. (Billy & Patsy Kirtley) Surface & Coai (reclamation only) 31-Juf-04 |
Mine Lessee/Assignee Lessor Type Date Comments and Recording Info Lease in-house but no confirmation available on recording Back in Black R&L Winn, Inc. Bobby Dukes & Jonnie Dukes, h&w {see notes for original Lessor information) Sublease Agreement 23-Qct-03 status Back in Black R&L Winn, Inc. John Wesley Horn, single Surface Mining Lease Agreement 24-May-06 Back in Black R&L Winn, Inc. Marjorie Dukes, unmarried Surface Mining Lease Agreement 23-Oct-03 Lease in-house but no confirmation available on recording Back in Black R&L Winn, inc. Glendell Horn and Martha Horn, h&w Surface Mining Lease Agreement 8-Dec~03 status Back in Black R&L Winn, Inc. Kenneth R. Dukes, unmarried Surface Mining Lease Agreement 13~Jan-G4 Back in Black R&t Winn, Inc. Bobby Dukes and Jonnie Dukes, his wife Surface Mining Lease Agreement 23-Oct-Q3 Rose France R&L Winn, Inc. Shirley A. Adler (SS# XXX~XX~6237) Roger A. France (SS# XXX-XX-5217) & Ellen L. France (SS# XXX-XX-2104); Ellen Surface Lease Option 26-Mar-08 Rose France R&L Winn, Inc. France signed, but not listed as Lessor at front of lease John K. Vaught, a/k/a Kenny Vaught & Lisa Michelle Vaught, his wife (1704 S.R. Surface Lease Option ll-Jan-08 Vaught R&L Winn, Inc. 1379, Central City, KY 42330} Martha Rodgers Haas, Trustee of the Martha Rogers Haas 1996 Revocable Trust Talmage G. Rogers, Jr. & Jean M. Rogers, his wife; James L. Rogers, III Surface 4~Nov~08 Vaught R&L Winn, inc. Testamentary Trustee under the Will of James L. Rogers jr. Coal Mining Lease Agreement 17-JUI-06 R&L Winn; Back in Black R&L Winn, Inc. W. Edwin Bandy and Exie Bandy, h&w Surface Mining Lease Agreement 22-Dee-G3 Legal not plottable R&L Winn; Back in Black R&L Winn, fnc. W. Edwin Bandy and Exie Bandy, h&w Surface Mining Lease Agreement 22~Dec~G3 Glendell R. Horn Property (surface) R&L Winn; Sack in Black Phoenix Coal Corporation Rudy Cundiff, an individual Memorandum/amendment 27-Sep~Q6 reference, coal lease should be Exhibit B J Rogers & R&6 Leasing assign interest to R L Winn for both Rose-France & Vaught R&L Winn, inc. R&G Leasing, LLC amd Jonathan L Rogers 31-Jul-G8 Rose-France and Vaught Rogers/Cherry Hill Ayrshire Collieries Corp. Martha F. Rogers, widow; Martha R. Poulos & George Poulos, her husband; T.G. Coal Mining Lease 11/30/1965 1/1/1986 (renewed *05) reference to Peabody Development Reserves Rogers, Jr. & Jean M. Rogers, his wife; J.L Rogers, 111 & Gloria Rogers, his wife; Sue R. Grable & William J. Grable, her husband (effective 01/01/1966} Company on 10/26/2005 extended this tease to 01/01/2019 (DB unknown-unrecorded); assignment of #11 & #12 coal to Charoiais at DB 516/34 |
6
County
Description
Cleaton Shop Property: DB 541/363 Deed of Conveyance dated 02/05/2009 between Jackie L. Brewer and Cathy L. Brewer, as Co-Trustees of
the Jackie L. and Cathy L. Brewer Trust, U.T.D. March 3, 2004 to Phoenix Coal Company; 5.001 acres located on Hwy. 1380 (also known as the
Cleaton Cut-off Road);
Brier Creek Property: DB 516/1 Deed of Conveyance dated 11/21/2005 between Peabody Development Company, LLC (Grantor) AND
Charolais Corporation (Grantee). All of the Grantors right title and interest in the surface estate only on the following: 100% ownership in 497
acres and 50% ownership in 91 acres, as shown on Exhibit A as Brier Creek #11 Ug., and further described in Exhibit B by legal description.
Further assigned to Evergreen Minerals from Charolais Corporation dated 01/01/2007 as shown in our Closing Documents and recorded in DB
525/1;
Brier Creek Property: DB 515/790
Deed of Conveyance dated 11/21/2005 between Peabody
Development Company, LLC & Peabody Coal
Company, LLC (Grantors) AND Charolais Corporation (Grantee). Brier Creek #11 Seam Only as conveyed in DB 398/37 as follows: 1/2
interest in the #11 in the following tracts: 61 ac & 109 poles & 12 ac & 16 poles +/-, less 50.25 ac, 35 ac, 5.06 ac, and 2 ac & 22 poles; T5-117
ac +/-; T16- 5.06 ac +/-; T19- 50 ac +/-; T21- 372 ac +/-; 3 ac +/-; Further assigned to Evergreen Minerals from Charolais Corporation dated
01/01/2007 as shown in our Closing Documents and recorded in DB 525/1 in Muhlenberg Co KY
Brier Creek Property: DB 516/391 Deed of Confirmation (and Correction): Dated 12/14/2005 between Peabody Development Company, LLC
& Peabody Coal Company, LLC (Grantors) AND Charolais Corporation (Grantee). Brier Creek #11 Seam Only as conveyed in DB 398/37 as
follows: 1/2 interest in the #11 in the following tracts: 61 ac & 109 poles & 12 ac & 16 poles +/-, less 50.25 ac, 35 ac, 5.06 ac, and 2 ac & 22
poles; T5-117 ac +/-; T16- 5.06 ac +/-; T19- 50 ac +/-; T21- 372 ac +/-; 3 ac +/-; Further assigned to Evergreen Minerals from Charolais
Corporation dated 01/01/2007 as shown in our Closing Documents and recorded in DB 525/1 in Muhlenberg Co KY
River Queen Property: DB 515/790 Deed of Conveyance: Dated 11/21/2005 between Peabody Development Company, LLC & Peabody Coal
Company, LLC (Grantors) AND Charolais Corporation (Grantee). All of Grantors right title and interest in all of the coal and coal mining rights
and privileges in and to the following lands: River Queen Area #11 & #12 Seams Only as conveyed in DB 398/37 as follows: Only that
portion of the following described property that lies south of a
point 50, from the centerline on the ROW of the River Queen RR and only that
portion of the same property lying north of the north ROW of U.S. Hwy. 70: 65 ac +/- Note: Deed of Confirmation & Correction found at DB
516/391, amending legal for River Queen; Further assigned to Evergreen Minerals from Charolais Corporation dated 01/01/2007 as shown in
our Closing Documents and recorded in DB 525/1 in Muhlenberg Co KY
River Queen Property: DB 516/391 Deed of Confirmation (and Correction): Dated 12/14/2005 between Peabody Development Company, LLC
& Peabody Coal Company, LLC (Grantors) AND Charolais Corporation (Grantee). River Queen Area #11 & #12 Seams Only as conveyed in DB
398/37 as follows: Only that portion of the following described
properties that lies south of a point 50, from the centerline on the ROW of the
River Queen RR and only that portion of the same property lying north
of the north ROW of U.S. Hwy. 70: Tract1: 65 ac +/-; Tract 4
(Designated as N-23): 59.5 ac +/-; Further assigned to Evergreen Minerals from Charolais Corporation dated 01/01/2007 as shown in our
Closing Documents and recorded in DB 525/1 in Muhlenberg Co KY
Vogue North Property: DB 516/391
Deed of Confirmation (and Correction): Dated 12/14/2005 between Peabody Development Company, LLC & Peabody Coal Company, LLC (Grantors) AND Charolais Corporation (Grantee). An undivided 1/2 interest in the following: 263 acres +/-;
Was
originally supposed to be conveyed in DB 515/790, but was erroneously omitted from that deed, so it was conveyed in this deed.
Evergreen Mineral Co. Inc. Deed of
Conveyance (Coal Mining Rights) Nov 12, 1995 Peabody Development Company, LLC & Peabody Coal
Company, LLC
Evergreen Mineral Co., Inc. Deed of Confirmation (and Correction) 12/14/2005 Peabody Development Company, LLC & Peabody Coal
Company, LLC
Evergreen Mineral Co., Inc. Deed of Conveyance (coal mining rights) 11/21/2005 Peabody Development Company, LLC & Peabody Coal
Company, LLC
Evergreen Mineral Co., Inc. Deed of Conveyance (coal mining rights) 11/21/2005 Peabody Development Company, LLC
Evergreen Mineral Co., Inc. Deed of Confirmation (and Correction) 12/14/2005 Peabody Development Company, LLC & Peabody Coal
Company, LLC
Island Dock Property: 56.691 ac +/- as shown in DB 172/310 in closing documents; dated 01/01/2007 from Charolais Corporation to Phoenix
Coal Processing Co., LLC;
Island Dock Property: 15.92 ac +/- as shown in DB 172/304 in closing documents; dated 01/01/2007 from Donald & Betty Bowles, h&w to
Phoenix Coal Processing Co., LLC;
Island Dock Property: Assignment of Powerline Easement as shown in DB 172/324 in closing documents; dated 01/01/2007 from Charolais
Corporation to Phoenix Coal Processing Co., LLC;
Island Dock Property: Assignment of Fleeting Rights as shown in DB 172/328 in closing documents; dated 01/01/2007 from Charolais
Corporation to Phoenix Coal Processing Co., LLC.
7
AT Other Leases TypDotlmm Lessor lassM Term Lass* Date Renewal Data Gross Acres Notas Tenant Rentier Lab Chatharine Fowler Carol Brown Uiry Brown Mary&reenwatt Oarreft Qmmmak DawdCrow* ftaglna Crowe Phoenix Coat Prootiiing 3yn l-Jul-07 1-Jul-1G EtuMnj & sa acres SCQ-DQ/month Tenant Rent for Office Ron Sanders Phoenix Coat Corporation 1 yr* Htto renwttal l-Jan-07 Baiting office spates 460000/1*100* |
8
Oxford Mining Company, LLC, Phoenix Coal Inc., Phoenix Coal Corporation, and Phoenix Newco, LLC Acquisition Agreement Schedule Schedule 2.1 (b) (v) AT Coai Sales Agreements Original Contract Date Contract Amendment Date (if applicable) Termination Date Seller Buyer 12/31/2007 12/31/2011 Phoenix Coal Corporation and Charolais Coal Sales, LLC Western Kentucky Energy Corp. 3/1/2006 12/31/2009 R & L Winn, Inc. Western Kentucky Energy Corp. and WKE Station Two Inc. 9/5/2007 7/28/2009 12/31/2012 Charolais Coal Sales, LLC Duke Energy Kentucky, Inc. 1/1/2008 2/27/2009 12/31/2009 Phoenix Coal Corporation Duke Energy Ohio, Inc. I 8/1/2007 1/1/2009 12/31/2010 Phoenix Coal Corporation and Charolais Coal Sales, LLC Kentucky Utilities Company i 1/1/2007 12/31/2010 Charolais Coal Sales, LLC, Charolais Coal No. 1, LLC, and Charolais Coal Resources, LLC Louisville Gas & Electric Company and Kentucky Utilities Company |
9
Oxford Mining Company, LLC, Phoenix Coal Inc., Phoenix Coal Corporation, and Phoenix Newco, LLC Acquisition Agreement Schedule Schedule 2.1 (b) (vi) AT Coal Purchase Agreements Original Contract Date Contract Amendment Date Termination Date Seller Purchaser 11/30/2007 7/6/2009 Life of Covol Reserves Covol Fuels No. 2, LLC Charolais Coal Sales, LLC 6/23/2009 12/31/09, extension available to 12/31/10 The American Coal Company Charolais Coal Sales, LLC |
10
Oxford Mining Company, LLC, Phoenix Coai Inc., Phoenix Coal Corporation, and Phoenix Newco, LLC Acquisition Agreement Schedule Schedule 2.1 (b) (vii) AT Other Contracts Original Contract Date Termination Date Phoenix Party Second Party Description 10/31/2007 10/31/2012 Phoenix Coal Processing, LLC Doug Everly and Norma Everly Fleeting Rights Agreement at Island Dock Additional space for barge fleeting at dock 9/12/1995 Until dock is no longer used Phoenix Coal Processing, LLC James Markwell and Sue Markwell Fleeting Rights Agreement at Island Dock monthly wheelage paid of $0.05 per ton of coal loaded at dock 1/1/2008 12/31/2010- automatically renewing for 1 year terms, unless terminated Phoenix Coal Corp. Heritage Petroleum LLC Diesel Fuel Supply Agreement 2/27/2009 02/27/2010-month to month thereafter, unless terminated Phoenix Coal Corp. Allied Security LLC Security Service Agreement 4/15/2009 10/15/2009 Phoenix Coal Corp. John Hedges Independent Contractor Agreement -Landman Services Heritage Petroleum Fuel Purchase Contracts, entered into with Phoenl Ix Coal Corporation Description Contract Dates Gallons Rate per Gallon Heritage Contract 1 AUG DEC 2009 210,000 $ 3.2080 Heritage Contract 2 # 111808 (ULS Dyed) AUG DEC 2009 420,000 2.2660 Heritage Contract 7 AUG DEC 2009 420,000 1.6600 Heritage Contract 1 JAN-MAR 2010 126,000 1.8980 Heritage Contract 2 JAN 2010 42,000 2.2620 Heritage Contract 2 FEB2010 42,000 2.2700 Heritage Contract 2 MAR 2010 42,000 2.2890 Heritage Contract 2 APR 2010 42,000 2.3150 Heritage Contract 2 MAY 2010 42,000 2.2900 Heritage Contract 2 JUN2010 42,000 2.3420 Heritage Contract 3 APR 2010 42,000 2.3300 Heritage Contract 3 MAY 2010 42,000 2.3390 Heritage Contract 3 JUN2010 42,000 2.3490 Heritage Contract 4 JAN 2010 42,000 2.1350 Heritage Contract 4 FEB 2010 42,000 2.1740 Heritage Contract 4 MAR 2010 42,000 2.1790 Heritage Contract 4 APR 2010 42,000 2.2360 Heritage Contract 4 MAY 2010 42,000 2.2450 Heritage Contract 4 JUN2010 42,000 2.2590 Heritage Contract 4 JUL2010 42,000 2.3080 Heritage Contract 4 AUG 2010 42,000 2.2950 Heritage Contract 4 SEP 2010 42,000 2.3390 Heritage Contract 4 OCT2010 42,000 Z3200 Heritage Contract 4 NOV2010 42,000 2.3320 Heritage Contract 4 DEC 2010 42,000 2.3380 Heritage Contract 5 JUL2010 42,000 2.1750 Heritage Contract 5 AUG 2010 42,000 2.2030 Heritage Contract 5 SEP 2010 42,000 2.2280 Heritage Contract 5 OCT2010 42,000 2.2320 Heritage Contract 5 NOV-DEC2010 84,000 2.2430 |
11
DSMRE & KPDES Permit Information SCh.dulll2.1(bl(vil~ DSMRE f!l!!!II Stale ,,ploye. Coal Severan Company Name Pmyloys Pad No Plumll NI!mbor l!!!W ~ E2lPlratfon DatI ~ EffeW.. [)ate Stat! File No. ~ QJ1I ~ lncorpOQlled l!il!!l. :w.ti9. Ken 669-0112 889-01:14 Iv:AAio 012964 10l3I2011 15-18134 9/1112002 18367 ·1 0904-5-001 li:l3l2009 KYG046704 61 ·1332297 62664 889-0112 66ll-0134Al Activo 012954 10l3I2011 15-18134 9/1112002 18367 ·1 lJII04.S.OOl 112312009 KYG045704 61 ·1332297 62664 Ken 669-0112 889-01:w.2 Iv:AAio 012954 101312011 15-18134 9/1112002 18367 ·1 0904-$-001 li:l3l2OO9 KYG045704 61 ·1332297 62664 869-0112 889-0134A3 Prolim 01 10l3I2011 16018134 9/1112002 7 · lJII04.S.OO1 112312009 KYG045704 61 ·1332297 82664 Kentu 889-0127 889-0136 Iv:AAio 013506 111l512011 16018622 3/1 O9()4.S.O()t 211312009 KYG045755 61 ·1 394 63102 669-0127 135Al Activo 01350S 1115121111 1601 3/1 1&430-1 0904-S-009 1312009 KYG045755 61 ·1332394 63102 Kent. 889-0127 66ll-0135A2 Activo 01350S 111112011 16018622 3/1J2003 O9()4.S.O()t 2/1312009 G0457 61 ·1332394 63102 l&Il, I:C6l1I ·lne: ;...: 5~W Hiii:. ~i1ij Ken ...·tln D UU iil 889-0149 Prelim 013240 61 ·1387393 62997 Kentu 889-0153 P10Ilm 01 61 ·1 7383 99 Renfro E u mentlnc.. Ken JUIU ine 889-0116 889-01<16 Activo 012752 61612010 15-1ll905 811___16613.1 ~ lJ29121lO9 G045525 31 ·1539559 63092 Renfro E nllne. Kent. eos. ine 669-0116 869-01461\1 Activo 012152 61612010 15-18905 12005 1661ll.1 ~ 112912009 KYG045a25 31 ·1 63062 Kenlu<l< 66W116 146A2 Activo 012752 61612010 1601ll905 811___16613.1 lJli04-S.OO2 1129i:lOO9 KYG045625 31-1639559 63062 |
404 & 401 Permit Information Schedule 2.1 (b)(vill) DSMRE USACOE Water Quality Company Nam. Pennlt Number permit 10 Effective Date permit IP Effective Date 889-0134 N1A 889-0134A2 1213112009 889-{)134A2-WOG-1 1211512008 889 ·0134A3 LRL2oo81437 889-{)134A3-waC-1 andin 889-0135 NlA N1A 889-o135A1 LRl.2oo5-125 11/1/2005 N1A 889-0135A2 lRL-2oo8-309 1/3012009 889-0135-waG-1 1212312008 |
Air Quality Permit Information Schedule 2.1 (b)(viii) AQ Company Name Permit Number Effective Date Expiratalon Date Schoate Mining Co., LLC Briar Hill crushin S-07-023 21212007 21212017 Schoate Mining Co., LLC Briar Hill washin S-07-o24 21212007 21212017 Schoate Mining Co., LLC Briar Hill washing 8-07-060 91912004 2/212014 |
Extended Weight Program Road Bonds Schedule 2. 1(b)(viii) Bond # Permit # Route County 1m! Begin End BondAmt 88850240 02-089175189-08 Hwy 175 Muhlenberg road 0 1.1 $200.000 88850240 02-089175189-08 Hwy 189 Muhlenberg bridge 5.38 88850240 02-089175189-08 Hwy 189 Muhlenberg bridge 9.987 88850240 02-089175189-08 Hwy 189 Muhlenberg bridge 10.174 88850240 02-089175189-08 Hwy 189 Muhlenberg bridge 11.042 88850240 02-089175189-08 Hwy 189 Muhlenberg bridge 11.373 1208979 02-0621752693-09 US62 Muhlenberg road 8.78 3.178 $ 300.000 1208979 02-0621752693-09 Hwy 175 MUhlenberg road 5.804 6.281 1208979 02-0621752693-09 Hwy 2693 MUhlenberg road 0 0.56 1208979 02-0621752693-09 US 62 Muhlenberg bridge 3.677 1208979 02-0621752693-09 US62 Muhlenberg bridge 4.702 1208979 02-0621752693-09 US 62 Muhlenberg bridge 4.865 1208979 02-0621752693-09 US 62 Muhlenberg bridge 5.402 1208979 02-0621752693-09 Hwy 175 Muhlenberg bridge 6.259 88850239 02-043150331-2008 US 431 McClean road 2.8 11.573 $200,000 88850239 02-043150331-2008 US 431 McClean road 0 12.451 88850239 02-043150331-2008 US 60 8P Davies road 0 0.7 88850239 02-043150331-2008 US 60 Davies road 10.179 10.615 88850239 02-043150331-2008 Hwy 331 Davies road 0 1.555 |
12
Software Licenses | Renewal Date | |
Microsoft Small Business Server 2003 (45 user licenses)
|
||
Software assurance Server and 5 user licenses
|
8/31/2010 | |
Software assurance and 10 user licenses
|
8/31/2010 | |
Software assurance and 20 user licenses
|
9/30/2010 | |
Software assurance and 10 user licenses
|
2/28/2011 |
MAS90
|
15 licenses | |||
FRx
|
4 licenses | |||
F9
|
5 licenses | |||
FAS
|
3 licenses | |||
Coal Software and Systems, Inc.
|
V6.0.123 | Only utilizing scale and coal tracking modules |
13
14
15
Oxford Mlnftig Company, LLC, Phoenix Coal Inc., Phoenix Coal Corporation, and Phoenix Newco, LLC Acquisition Agreement Schedule Schedule Z.1 (e) (I) AT Fixed Assets Debt Company TotalsSchoate Schoate SchoateSchoate Schoete Schoate Schoate Schoate SchoateSchoateSchoateSchoate Lender CAT CAT CAT Deere CAT CAT Volvo Komatsu Komatsu Komatsu CAT Komatsu Note Number 496985 496996 499935 80067 529232 536249 7581867 131717-000 131717-004 133586 541558 133588-007 JRP01812 Phoenix Note #/Serial# ABJ00602 7PZB1450 KPZ02495 QO01007 7PZ75010 JRP01613 2048 55024 A10079 10743 JRP01888 A100B9 Proceeds Used For Equipment Equipment Equipment Equipment Equipment Equipment Equipment Equipment Equipment Equipment Equipment Equipment EX1900LD-8 PC800 Komatsu HD785 Komatsu D475A Komatsu HD785 Collateral D7RTractor DURTractor DBTTractor Shovel D11RTractor 777FTrucks(2) G990Qrader Excavator 7Truck 3Dozer 777FTruck 7Truck NeworUsed Used New Used New Used New New New New Used-off lease New New Original note amount 314,862.49 1532,725.00 539,009.00 2588,078.00 1,163,350.00 2,497,418.00 338,895.00 555,900.00 1,129,200.00 239,100.00 1,248.884.00 1.129,200.00 Original note date Nov-07 Nov-07 Dec-07 Apr-08 Aug-08 0*08 Sep-08 Oct-08 Oct-08 Dec-08 Dec-08 Feb-09 Maturity Date Nov-12 Nov-12 Deo-12 Oct-10 Aug-12 Ocl-11 Sep-12 0ct-11 Nov-12 Oec-10 Dec-11 Feb-13 Term (months) 606060304836483848 24 3648 Finance Rate 7.50% 6.03% 8.18% 8.41% 5.75% 730% 6.45% 8.75% 7,50% 6.75% 8.75% 8.50% Down payment 6,270.01 108,242.50 10,411.54 250,000.00 110,260.66 824,267.00 85,000.00 112,900,00 - 312,133.50 112,900.00 Monthly Payment Amount 6,270.01 28,437.73 10.411.54 86,687.62 23,009.41 58,266.64 6,015.25 17,101.10 24.573.01 10,678.05 29,679.54 25,050.07 G/L Account 24500-02 24500-03 24500-04 24500-05 24500-06 24500-07 2450008 24500-09 24500-10 24500-11 24500-12 24500-13 Estimated Debt Balance 07/31/09 22,774,187.41 216.41Z47 934,265 24 376,799.13 1230,21858 759,16627 1,443,485.90 20624824 427.265.32 873,078.49 173,626.55 773,26543 925,770.18 08/31/09 21,988,829.09 211,495,04 912519.09 388,291.64 1,152,15051 739,794.53 1,394241.05 201,34157 412,567.59 853,698.00 163565.09 749224.28 907.277.63 09/30/09 21505,457.77 206,546.87 890,683.74 359,740.35 1,073,53754 720,329.87 1544,688.42 196,408.53 397,787.18 834201.37 154,048.72 725,007.83 888,654.11 10/31/09 20,638203.39 201587.78 868,698.64 351,145.04 994.373.84 700,772.14 1294,826.08 191,448.98 382,923.83 814,587.91 144,177.13 700,614.81 889,898.67 11/30/09 19,987,068.40 196,557.57 846,62324 342,505.48 914,654.92 681,120.60 1244,652.10 188,46277 367576.48 794,85652 134,250.02 676,043.92 851,010.38 12131/09 19,292,002.86 191,516.04 824,436.98 333.821.44 834,37751 661,374.89 1,194,184.54 181,449.76 35254525 775,007.69 124,267.07 651,293.87 831,98830 01/31/10 18,613.00635 188,443.01 802,139.31 325,092.69 753,537.49 641,53457 1,143,361.43 176,409.80 337,829.47 755,039.52 114227.96 628563.35 812.831.48 02/28710 17,930,044.52 181,338.27 779,729.67 316,319.02 672,130.92 621.599.18 1,092240.80 171,342.75 322,628.66 734,951.70 104.132.38 601251.04 793538.97 03/31/10 17,243,083.07 176201.62 757,207.49 307,500.17 590,153.82 601,56827 1,040,800.66 168,248.47 307,342.35 714,743.50 93,980.02 575,955.62 774,109.80 04/30/10 16,552,344.58 171,032.87 734,57221 298,63552 507,602.19 581,441.37 989,039.02 161,126.81 291,970.05 694,41420 83,770.55 550,475.76 754,543.01 05/31/10 15,864,391.03 165,831.82 711.82327 289,72854 424,472.03 561,218.03 936,953.87 155,977.82 278.511.28 673,963.10 73,503.65 524,810.11 734,837.62 06/30/10 15,172,430.40 160,598.28 688,960.08 280,770.29 340,75925 540.897.79 884,543.19 150,800.75 260.98556 653,389,43 63,179.00 498,957.31 714.992.65 07/31/10 14,467.792.44 155531.99 665,982.10 271,78844 256,459.78 520,480.18 831,804.94 145,598 .05 245,33259 632,692.48 52,79628 472,916.00 695,007.11 08/31/10 13,776591.55 150.032.80 642.888.72 262,720.24 171,589.52 499,964.74 778,737.08 140,363.38 229,611.28 611571.51 42.355.15 448,684.81 674580.01 09/30/10 13,080,972.06 144,700.49 619,879.37 253,625.46 86,084.33 479,350.99 725537,55 135,102.58 213,801.74 590,925.78 31,855.29 420,262.35 654,610.34 1001/10 12,381,509.88 139,334.86 696,35347 244,483.87 458,638.47 671,604.27 129,813.51 197,903.27 569,854.53 21,29657 393,647.22 634,197.09 11/30/10 11,764,86855 133,935.69 572,910.43 235,295.21 437,826.70 817,535.18 124,496.01 181,915.38 548,657.01 10,678.04 366,838.02 613,63925 12/31/10 11,144,343.07 128502.78 549,349.67 226,059.25 418.915.21 583,128.11 119,149.93 165,837.55 527,332.47 339,833.34 592,935.79 01/31/11 10,531251.76 123,03551 525,670.60 218,776.74 395,903.52 508.381.02 113,775.11 149.86929 505,880,15 312531.75 572,085,68 02/28711 9,914,696.37 117,53457 501,872.62 207,444.44 374,791.15 453,291.78 108,371.40 133,410.08 484299.28 285,231.82 551,087.88 03/31/11 9294,656.67 111,999.45 477,955.13 198,065.10 353,57751 397,858.19 102538.85 117.059.41 462,589.09 257,632.10 529,941.35 04/30/11 8,671,112.32 106,429.44 453,917.54 188,63747 332,262.43 342,078.16 97.478.70 100.616,77 440,748.80 229531.13 508,645.03 05/31/11 8,044,042.92 100,824.61 429,75924 179,161.32 310,845.11 285,949.51 91.985.39 84,081.64 418,777.64 201.827.44 487,197.86 06730/11 7,413,427.85 95,184.75 405,479.62 189,636,38 289.325.17 229,470.05 86,464.56 67,453.50 396,874,82 173,81958 465.598.77 07/31/11 6,779246.45 89,509.64 381,078,08 160,082.40 267,702.11 172,837.60 80,914.05 50,731.83 374,439,55 145,206.00 443,846.69 08/31/11 8,141,477.91 B3.799.07 356,554,00 150,439.14 245,975.44 115,449.94 75,333.72 33,918.10 352.071.05 116,585.25 421,940.53 09/30/11 5,500,10126 78,052.80 331,906.77 140,76853 224,144.66 57,904.86 69,723.39 17,00578 329,568.50 87,755.81 399,879.21 10/31/11 4,855,095.03 72270.62 307,135.77 131,043.73 202.209.28 64,082.90 306,931.11 58,716.16 377,661.62 11/30/11 4281,806.73 66,452.30 282240.38 121,271.07 180,168.79 58,412.10 284,158.07 29,464.76 355286.65 12/31/11 3,777,344.37 60,597.82 257,219.97 111,448.11 158,022.68 52,710.82 281,248.58 332.753.19 01/31/12 3,299,646.75 54,706.34 232,073.91 101,574.57 135,770.47 46,978.89 238,201.77 310,060.12 02/29/12 2,889.04158 48,77824 206,801.58 91,650.21 113,411.63 41216.15 215,016.88 287.206.31 03/31/12 2,435.923.58 42,813.09 181,402.34 81,674.76 90,945,65 35,422.44 191,693.06 264,190.82 04/30/12 2,091,058.09 36,810.86 155.875.55 71,847.96 68572.02 29,597.59 168229.47 241,011.90 05/31/12 1,744205.84 30,770.72 130,220.58 61,569.54 45,69023 23,741.43 144,62529 217,669.00 06/30/12 1,413,879.92 24,893.03 104,436.77 51,43923 22,899.75 17,853.79 120.879.65 194,160.75 07/31/12 1,081,671.17 18,577.35 78523.49 41,258.77 11,934.50 96,991.73 170,485.99 08/31/12 795,933.51 12,423.45 52,480.08 31,021.90 5,983.40 72,960.68 148,643.53 09O0/12 572,807.63 6231.09 26,305.69 20,734.33 48,785,59 122,632.19 10/31/12 354,393.16 - 10593.78 24,465.66 98,450.76 11/30/12 246,646.86 74,098.05 12/31/12 173,243.73 49,572.84 01/31/13 99,320.66 24,873.91 02/28/13 24,873.91 03/31/13 |
Oxford Mining Company, LLC, Pti Acquisition Agreement Schedule Schedule 2.1(c)(1) AT Fixed Assets Debt Company Schoate Schoate Schoate Schoate Schoate R & L Winn R1L Winn R & L Winn R&LWinn R & LWInn R&L Winn PCP PCP Lender Komatsu CAT Komatsu Komatsu Komatsu CAT CAT CAT CAT CAT CAT CAT CAT Note Number 133586-008 544935 133586-009 133586-010 133586-XXX 497416 501540 508533 510382 518288 516458 498200 500789 Phoenix Note #/Serial# A10090 H4C00345 A10093 20063 20104 7PZ01448 AZX00629 JRP01082 JRP01234 7PZ75009 JRP01305 7PZ01493 AZX00623 Proceeds Used For Equipment Equipment Equipment Equipment Equipment Equipment Equipment Equipment Equipment Equipment Equipment Equipment Equipment Komatsu HD785 CAT 992K Komatsu HD785 Komatsu D475A Komatsu 0475A Collateral 7Truck Loader 7Trudt 5Dozer SDozer 011RTroctor D92G Loader 777FTruck 777FTiucx DURTractor 777FTrucK DURTraclor 992G Loader NeworUsed New New New Used Used off lease New New New New Rebuild New New New Original note amount 1,129,200.00 1,699,690.00 1,129,200.00 734,000.00 808523.85 1,532,725.00 1,656,484.00 1,145574.00 1,145,374.00 1,084,436.00 1,145,375.00 1,528,367.00 1,658,484.00 Original note date Feb-09 Mar-09 Apr-09 May-09 Aug-09 Nov-07 Dec-07 Feb-08 Feb-08 Apr-08 Apr-08 Nov-07 Dec-07 Mature Date Feb-13 Mar-12 Mar-13 May-12 Aug-12 Nov-12 Dec-11 Feb-12 Feb-12 Apr-12 Apr-12 Nov-12 Deo-11 Term (monlhs) 48 38 48 38 36 60 48 48 48 48 48 60 48 Finance Rate 8.50% 8.75% 550% 8.25% 7.99% 8.03% 525% 5.25% 525% 8.25% 625% 653% 525% Down payment 112,900.00 424,835.00 112,900.00 146,760.00 161,864.73 106,24252 82.806.70 57288.70 57.268.70 24,966.86 56,767.78 105,940.42 82,806.70 Monthly Payment Amount 25,050.07 40,391.88 25,050.07 18,469.78 20,260.95 26,437.73 36,018.71 4,904.06 24,904.08 24,966.86 25,42259 26,362.58 36,018.71 G/L Account 24500-14 24500-15 24500-16 24500-17 24500-18 24500-01 24500-02 24500-03 24500-04 24500-05 24500-08 24500-02 24500-03 Estimated Debt Balance 07/31/09 925,770.18 1.149,103.68 944,132.62 559,938.97 808,32355 93426524 947225.39 688,726.01 898,726.01 734,155.56 747556.07 931,608.82 947225.39 08/31/09 907,277.63 1,117,090,68 925,770.18 545,263.75 646,658.92 912518.09 915552.70 676,879.75 676,879.75 713,012.43 728,027.00 909,924.50 915,352.70 09/30/09 888554.11 1,084,84425 907277.63 530,487.64 630,703.64 890,663.74 883540.50 654,937.88 54,937.88 691.759.18 704,385.80 888,131.29 883,340.50 10/31/09 869598.67 1,052,36£69 888,654.11 515.609.95 614,642.13 868,698.84 851,188.18 632,899,89 632599.99 670585.23 682,631.89 866,228.64 851,188.18 11/30/09 851510.38 1,019,844.29 869,898.67 500.62957 598.473.67 848.82324 818,895.13 610,785.66 610,765.68 648,920.01 660,764.67 844,218.00 818,895.13 12/31/09 831.988.30 986,687.32 851,010.38 485547.00 582.197.58 824,436.98 788.460.73 588534.48 588,534,46 627,332.94 638,783.56 822,092.82 786,460.73 01/31/10 812.831.48 953,490.04 831,988.30 470,360.34 585,813.08 802,13951 753,884.37 566205.97 566205.97 805,633.44 616,687.97 799,858.55 753,884.37 02/28/10 793,538.97 920,050.69 812531.48 455,06928 549519.50 779,729.67 721,165.42 543,779.77 543,779.77 583,820.92 594,477.30 777.512.62 721,165.42 03/31/10 774,109.80 886,36751 793.538.97 439,673.08 532,718.10 757,207.49 88850328 521,255.42 521255.42 561,894.79 572,150.95 755,054.48 688,303.26 04/30/10 754543.01 852,438.73 774,10950 424,171.04 516,002.15 734,57221 65529728 498,632.50 498,632.50 539,854.47 549,708.31 732,483.56 655,29728 05/31/10 734,837.62 618262.55 754,543.01 408,582.41 499,176.91 711523.27 822,146.79 475,910.58 475,910.58 517,699.35 527,148.78 709,79950 622,146.79 06730/10 714,992.65 783,837.17 734,837.62 392546.49 482239.85 688.960.09 588,85122 453,089.22 453,089,22 495.428.84 504,471.76 687,001.12 588,85122 07/31/10 695,007.11 749,160.77 714,992.85 377,022,51 465,189.61 665,982.10 855,409.92 430,167.99 430.167.99 473,042.34 481,676.63 884,088,46 555,409.92 08/31/10 674,880 .01 71423152 895,007.11 361,089.75 448,026.05 642,888.72 521,822.25 407,148.45 407,146.45 45053924 458.762.77 641,060.74 52152225 09/30710 654,61054 879,047,58 674,880.01 345,047.45 430,74821 819,879.37 488.087,58 384,024.18 384,024.16 427,918.94 435,729.57 617,917.38 488,087.56 10/31/10 634,197.09 643,807.09 654,610.34 328,89458 413,35553 596,353.47 45420521 360,800.68 360,800.68 405,180.82 412,576.41 594.657,80 454205.21 11/30/10 813,639.25 607,908.18 634,197.09 312,631.22 395,846.64 572,910.43 420,174.58 337,475.57 337,475.57 382,32428 389,302.66 571281.42 420,174.58 12/31/10 592,935.79 571,948.96 813,63925 298255,77 375221.37 549.34987 385,994.96 314548.39 314,048.39 359,348,69 385,907.89 547,787.65 385,994.96 01/31/11 572,085.68 535,727.54 592,93579 279,787.73 360,478.74 625570.60 351,665.75 290518.88 290,518,68 338253.44 342,390.87 524,175.90 351,665.75 02/28/11 551,087.88 499242.01 572,085.68 263,16655 342,617.98 501,872.62 317,188,28 268,886.00 286,886.00 313,037.90 318,751.57 500,445.58 317,18828 0301/11 529,94155 462,490.44 551.087.88 246,450.82 324.63828 477,955.13 282555.90 243,14850 243,149,90 289,701.45 294,989.15 476,598.10 282.555.90 04O0/11 508,845.03 425,47059 529,941.35 229,620.38 306538.89 453,91754 247,773.94 21950952 219509,92 266,243.45 271,102.96 452526.85 247,773.94 0501/11 487.197.88 388,181.40 508,845.03 212,67423 288,318.98 429,75924 212,839.74 195,36551 195,385.61 242,86327 247,09257 428.53724 212,839.74 06O0/11 465598.77 350,62051 487,19758 195,61158 269,977.75 405,479.62 177,752.63 171,316.52 171,318.52 218,98028 222,956.72 404,326.66 177,752.63 0701/11 443,846.89 312,784.73 465598.77 178,431.62 251,514.40 381,078.08 142.511.95 147,162.18 147,162.18 195,13354 198,69556 379,994.50 142,511.95 08/31/11 421,94053 274,673.57 443,846.69 161.133,55 232,928.12 358,554,00 107,117.02 122,902.14 122,902.14 171,18350 174,307.64 355,540.16 107,11752 09O0/11 399.87821 236284.52 421,940.53 143,716,55 214218.08 331,906.77 71,567.18 98535.83 98,535.93 147,108.02 149,792.90 330,963.00 71,567.16 1001/11 377,661.62 197,815.55 399,87921 128,179.81 195,383.47 307,135.77 35,881.70 74,083.09 74,063.09 122,907.35 125,150.48 306,262.43 35,861.70 1100/11 355,288.65 158,664,62 377.661.62 108,52251 176,423.45 282240.38 49,483.15 49,483.15 98,580.63 100,379.72 281,437.82 1201/11 332,753.19 119,429.67 35528855 90,743.82 157537.19 257219.97 24,795.64 24,795.64 74,12721 75,479.94 256,488.55 01O1/12 310,080.12 79,908.63 332,753.19 72,842.90 138,123.84 232,073.91 49,548.43 60,450.48 231,413.99 02/29/12 28720651 40.099.42 310,060.12 54,818.91 118,782.56 206,80158 24,837.62 25290.65 206,213.52 0301/12 264,190.62 287,208.31 36,671.00 99,312.50 181,402.34 - 180,886.50 0400/12 241,011.90 284,190.62 18,398.31 79,71251 155,87555 155,432.29 05/31/12 217,869.00 241,011.90 59,982.61 130220.58 129,85026 06730/12 194,160.75 21758950 40,121.04 104,436.77 104,139.77 07/31/12 170,485.99 194,160.75 20,12723 78,523.49 78,300.17 08O1/12 146,643.53 170,485.99 52,480.08 52,330.81 09/30/12 122,632,19 146,643.53 26,305.89 26231.04 1001/12 98,450.76 122,632.19 11/30/12 74,098.05 98,450.76 1201/12 49,572,84 74,098.05 01/31/13 24,87351 49,572.84 02/28713 24,873.91 0301/13 |
Oxford Mining Company, LLC, Ph Acquisition Agreement Schedule Schedule 2.1 (c) (I) AT Fixed Assets Debt Company CMC CMC CMC CMC CSJJ C&R RENFRO Lender CAT CAT CAT CAT 1ST KY 1ST KY CAT Note Number 497012 529238 533033 533032 43682 49401 480677 Phoenix Note #/Serfal# 7PZ01449 JRP01367 JRP01504 JRP01506 Proceeds Used For Equipment Equipment Equipment Equipment Equipment Equipment Equipment Collateral D11R Tractor 777F Truck 777FTru<* 777F Track None None D11R New or Used New New New New Original note amount 1,532,725,00 1,286,282.00 1,248,884.00 1,248,884.00 S0.180.31 200,070.00 274,000.00 Original note date Nov-07 Aug-OS Sep-08 Sep-08 Apr-07 Apr-05 Auo-07 Maturity Date Nov-12 Aug-12 Sep-12 Sep-12 Apr-10 Apr-10 Aufl-10 Term (months) 60 48 48 48 36 60 36 Finance Rate 6.03% 625% 8.38% 6.39% 850% 5.50% 849% Down payment 106,242.50 120,487.63 178,557.45 178,657.45 Monthly Payment Amount 26,437.73 25,269.81 22,049.62 22,049.62 2,869.51 4,057.71 8,648.24 GIL Account 24500-01 24500-02 24500-03 24500-04 24500-03 24500-04 24500-00 Estimated Debt Balance 07/31/09 934,265.24 827,559.42 738,880.95 738,680.95 24,855.00 35.885.93 107,782,79 08/31/09 912,519.09 808,599.82 720,564.81 720,564,81 22,175.98 32,091.53 89,837.97 09/30/09 890,683.74 785,531.05 702,352.20 702,352.20 19,478.42 28,186.54 91336.95 10/31/09 868,898.64 764,352.55 684,042.81 684.042.61 18,751.36 24.203.57 83,779.31 11/30/09 846,623.24 743,063.74 665,635.52 665,635.52 14,010,23 20,218.61 75,684.88 12O1/09 824,436.98 721,864.05 847,130.41 847,130.41 11,244.63 18,19320 87,492.60 01/31/10 802,139.31 700,152.91 628,526.76 828,526.76 8,481.30 12,14331 59,282.73 02/28/10 779,729.67 878,529.73 609.824.04 609,824,04 5,656.64 8,081,60 50,974.63 03/31/10 757207.49 656,793.93 591,021.73 591,021.73 2,82629 3,941.69 42.627,89 04/30/10 734,572.21 634,944.92 572,119.30 572,119.30 - 34,222.09 05/31/10 711,823.27 612,982.11 553,11622 553,11822 25,756.83 06/30/10 688,960.09 590,90452 534,011.94 534,011.84 17,231,67 07/31/10 665,982.10 568,712.74 514,805.83 514,805.93 08O1/10 642,888.72 546,404.98 495,497.65 495,497.65 09/30/10 819,679.37 523,981.03 478,08635 478,088.55 10/31/10 598,353.47 501,440.29 456,572.09 456,572.09 11/30/10 572,910.43 478,782.15 436,853.72 436,953.72 12/31/10 549,349.67 456,006.00 417230.88 417,230.88 01/31/11 325.670.60 433,11122 397,403.01 397,403.01 02/28/11 501.872.62 410,09720 377/189.58 377.469.66 03/31/11 477,955.13 388,983.31 357,429.97 357,429.97 04/30/11 453,917.54 383,708.83 337,283.66 337283.88 05/31/11 429,75924 340,333.44 317,030.08 317,030.08 06/30/11 405,479.62 316,83820 296.668.85 296,668.65 07/31/11 381,078,08 293,216.58 278,198.79 276,198.79 08/31/11 356.554.00 269,473.94 255,619.93 255,619.93 09/30/11 331,906.77 245,607.64 234,931.49 234,931.49 10/31/11 307,135.77 221,817,04 214,132.88 214.132.88 11/30/11 282,240.38 197,501.49 193,223.52 193,22332 12/31/11 267,219.97 173,280.33 172202.82 17Z202.82 01/31/12 232,073.91 148,892.92 151,070,18 151,070.18 02*29/12 206,801.58 124,398.59 129,825.01 129,825.01 03/31/12 181,402.34 99,776.69 108,488.71 108,468.71 04/30/12 155,87535 75,026.55 86,994.68 86,994.68 05/31/12 130,220.58 50,147.50 65,408.31 65,408.31 06/30/12 104,436.77 25,138.87 43,706.99 43,708.99 07/31/12 78,523.49 21,890.11 21.890.11 08/31/12 52.480.08 09/30/12 26,305 89 10/31/12 11/30/12 12/31/12 01/31/13 02/28/13 03/31/13 |
16
Outstanding | ||||||||||||||
Company | Project/Mine | Permit No. | Acres | Bond Amount | ||||||||||
R&L Winn, Inc.
|
Back In Black | 889-0135 | 429.7 | $ | 1,205,400 | |||||||||
Schoate Mining Co., LLC
|
Briar Hill | 889-0134 | 1,655.1 | $ | 3,164,100 | |||||||||
Phoenix Coal Corporation
|
K.O. Mine | 889-0141 | 224.0 | $ | 654,200 | |||||||||
Renfro Equipment Inc. **
|
Jessup Mine | 889-0146 | 190.0 | $ | 771,300 | |||||||||
|
||||||||||||||
TOTALS
|
2,498.8 | $ | 5,795,000 |
** | MIS shows $671,300 which does not include (2) $50,000 supplemental assurance bonds, |
17
DSMRE & KPDES Permit Information _ul.2.1 (c)(iii)-2 DSMRE fmJlU Slale Employer Coal Severance Permit NumlJer §lIlus Expiration Data Iif1UtjylI PlI!lI S!lIt!!EII,No · ~ Il!tIl ~ ~ Jll.N9., IIlUl2. Companv Name Pmlous Permil No l!l1MBUl ~ oelaware 854-6038 014259 NlA 1518968 2I2l2OO6 18&15 None NlA 20-1372167 63210 854-5019 Idle Crittendan Coun eoa Inc. ft28..OOO1 Tax ~ Mine 82B-0001 82B-0002 _mation 013332 112512010 1518630 12/1512004 18616 None KY 959 30.0053027 63170 Crittenden Coun coal Inc. Kenlucl< Prov. No. 1 854-5019 854- Reclamation 013332 6/1112009 1502156 11/1212001 18256 N .... KYGIl449211 3ll-0053O27 63170 Charulals Mlnln Com n LLC Oelawarr GrallrmtlS 88&-0129 88&-0136 ReclilmaliOn 014319 411812010 1518882 7/1812005 10915-21 None KYG046112 20-8013656 63296 Phoenix coal Pro.....ln LLC Qelawanl Rock Crusher I\lIlI.Ol ecIII 1 1& 51 151 311512004 10915-20 None NlA 20-8013611 63297 Ph......lx Coal_. LLC DeIawwe Point Min! 854-0211 854-0253 Red.mation 014918 711012013 15- 8080 1111811998 18276- None KYO 11 13611 63297 Pael Rllou,,, lLC Joe Allen 917-5021 II...... 014157 13 15-1ll2ll4 7/1812008 KY0107191 37-1495296 63398 C&RCoa Inc. Kenlucl< Boe<1le.-Soufh 88Il-0122 88Il-0150 Roclomatian 0132<10 121312011 15-18377 5/112001 18152.2 09IJ4..S.008 2/1312009 KYOl00781 61-1357393 062997 C&RCoa Inc. Ke EbrnrenrMine 88~124 88Il-0151 Reclamatian 013240 1111l121l12 15-18377 51112001 18152.2 09IJ4..S.008 2/1312009 61-1387393 62997 C&RCoa Inc. Ke al_C_Mine 88&-0120 88Il-0152 Roclomatian 0132<10 Ill1212OO8 15-18377 6/112001 18162.2 0904-s-008 2/131201lll KYG046020S 61-1387393 62997 JPhoenlx Goal Inc. 014617 Eorelgn E!l!!lign lellOllI MinrraI Co., Inc. 013010 Kettluc!cy 61-1332209 ~ 61-1332300 Inc. Maroon Redamallon LLC IMarcon Roclamatlon, lLC I ~ ll54-5026 r:::::::=l |
404 & 401 Permit Information Schedule 2.1 (c)(iii)-2 DSMRE USACOE Water Quality Company Name Permit Number permitlQ Effective Date permit 10 Effective Date 828-0002 LRL ·2005-131 ·GJD 3/1312009 1211512004 854-5038 N/A N/A 889-0136 LRL-2004-527 7/1812005 2006 ·0198-3 51112005 LLC 889-0123 N/A NlA LLC 854-0253 N/A N/A 917-5021 7/1/2008 917 ·5021-WQC ·1 512712008 889-0150 NlA N/A 889-0151 N/A Rahall 889-0152 N/A N/A |
Extended Weight Program Road Bonds Schedule 2.1{c){lii)-2 Bond # Permit # Route County 1m! Begin End BondAmt 88850237 02-02911508-07 Hwy 291 Hopkins road 5.313 6.302 $50,000 88850237 02-02911508-07 Hwy 1508 Union bridge 1.432 |
18
Oxford Mining Company, LLC, Phoenix Coal Inc., Phoenix Coal Corporation, and Phoenix Newco, LLC Acquisition Agreement Schedule Schedule 2.1 (c) (vi) AT other Liabilities Not Previously Described Agreement Type of Aareement Date Termination Date Phoenix Company Second Party Until all coal is mined from property Overriding Royalty 7/3112008 specified In overriding royalty C&R Coallne. Howard Covinoton and Jonathan Rogers This is an overriding royalty agreement created by the C&R acquisition on July 31, 2008. The Second Parties receive a total of $0.60 per ton for coal mined and sold from two leased properties. The leased properties are Dart of the C&R Beech Creek reserves and the Back in Black reserves. Reserve Payments I 7/31/2008 I 7/3112010 IPhoenix Coal Corporation IStuart and Robin Renfro This is a condition of the Stock Purchase Agreement with Stuart and Robin Renfro. As part of the Renfro Equipment inc. acquisition in July 2008, the Company agreed that if, by July 31, 2010,It acquires at least 1.5 minion reserve tons (Additional Reserves) as defined by National Instrument 43-101 (NI43-101) due to the direct efforts of the sellers (Stuart and Robin Renfro), the Company will pay the sellers $1,000,000 for the first 1.5 million tons of reserves, plus $0.50 per ton for each reserve ton in excess of 1.5 million. The acquisition closing documents define a specific territory from which the Additional Reserves can be acquired. The acouisition of the Additional Reserves must be on terms and conditions acceptable to the Company in its sale, reasonable discretion. |
19
AT Assets and AT Liabilities as of June 30, 2009
Schedule 2.5(a)
AT Assets &
Working
AT Liabilities
Capital
3,288,714
3,288,714
877,841
877,841
168,266
168,266
374,400
374,400
200,000
200,000
15,000
15,000
12,825
12,825
4,937,046
631,747
490,236
3,683,996
30,182,428
1,775,000
65,965
319,870
37,149,242
(9,430,209
)
27,719,033
121,325
121,325
121,325
32,777,404
5,068,371
7,915,623
4,387,154
4,387,154
495,000
678,130
678,130
8,475
8,475
331,565
331,565
13,815,947
22,596,234
(7,915,623
)
2,587,981
17,268,592
1,692,865
$
32,777,404
5,405,324
(346,963
)
20
Security Agreement and Promissory Note #480677, dated July 17, 2007 | ||
Parties:
|
Renfro Equipment, Inc. (Debtor) and Caterpillar Financial Services Corporation |
Guaranty of Payment (to Security Agreement and Promissory Note #480677) | ||
Parties:
|
Phoenix Coal Corporation (guarantor), Renfro Equipment, Inc. (Obligor), and Caterpillar Financial Services Corporation (Seller) |
Installment Sales Contract #508533, dated February 4, 2008 | ||
Parties:
|
R&L Winn, Inc. (Buyer) and Whayne Supply Company (Seller) |
Guaranty of Payment (to Installment Sales Contract #508533), dated February 4, 2008 | ||
Parties:
|
Phoenix Coal Corporation (guarantor), R&L Winn, Inc. (Obligor), and Whayne Supply Company (Seller) |
Collateralized Guaranty of Payment (to Installment Sales Contract #508533), dated February 4, 2008 | ||
Parties:
|
Phoenix Coal Corporation (guarantor), R&L Winn, Inc., (Obligor) and Whayne Supply Company (Seller) |
Installment Sales Contract #510382, dated February 27, 2008 | ||
Parties:
|
R&L Winn, Inc. (Buyer) and Whayne Supply Company (Seller) |
21
Guaranty of Payment (to Installment Sales Contract #510382), dated February 27, 2008 | ||
Parties:
|
Phoenix Coal Corporation (guarantor), R&L Winn, Inc. (Obligor), and Whayne Supply Company (Seller) |
Collateralized Guaranty of Payment (to Installment Sales Contract #510382), dated | ||
February 27, 2008 | ||
Parties:
|
Phoenix Coal Corporation (guarantor), R&L Winn, Inc. (Obligor), and Whayne Supply Company (Seller) |
Installment Sales Contract #516288, dated April 25, 2008 | ||
Parties:
|
R&L Winn, Inc. (Buyer) and Whayne Supply Company (Seller) |
Guaranty of Payment (to Installment Sales Contract #516288), dated April 25, 2008 | ||
Parties:
|
Phoenix Coal Corporation (guarantor), R&L Winn, Inc. (Obligor), and Whayne Supply Company (Seller) |
Collateralized Guaranty of Payment (to Installment Sales Contract #516288), dated | ||
April 25, 2008 | ||
Parties:
|
Phoenix Coal Corporation (guarantor), R&L Winn, Inc. (Obligor), and Whayne Supply Company (Seller) |
Installment Sales Contract #516458, dated April 28, 2008 | ||
Parties:
|
R&L Winn, Inc. (Buyer) and Whayne Supply Company (Seller) |
Guaranty of Payment (to Installment Sales Contract #516458), dated April 28, 2008 | ||
Parties:
|
Phoenix Coal Corporation (guarantor), R&L Winn, Inc. (Obligor), and Whayne Supply Company (Seller) |
Collateralized Guaranty of Payment (to Installment Sales Contract #516458), dated | ||
April 28, 2008 | ||
Parties:
|
Phoenix Coal Corporation (guarantor), R&L Winn, Inc. (Obligor), and Whayne Supply Company (Seller) |
Installment Sales Contract #529232, dated August 13, 2008 | ||
Parties:
|
Schoate Mining Co., LLC (Buyer) and Whayne Supply Company (Seller) |
Guaranty of Payment (to Installment Sales Contract #529232), dated August 13, 2008 | ||
Parties:
|
Phoenix Coal Corporation (guarantor), Schoate Mining Co., LLC (Obligor), and Whayne Supply Company (Seller) |
22
Installment Sales Contract #529236, dated August 13, 2008 | ||
Parties:
|
Charolais Mining Company, LLC (Buyer) and Whayne Supply Company (Seller) |
Guaranty of Payment (to Installment Sales Contract #529236), dated August 13, 2008 | ||
Parties:
|
Phoenix Coal Corporation (guarantor), Charolais Mining Company., LLC (Obligor), and Whayne Supply Company (Seller) |
Installment Sales Contract #533032, dated September 19, 2008 | ||
Parties:
|
Charolais Mining Company, LLC (Buyer) and Whayne Supply Company (Seller) |
Guaranty of Payment (to Installment Sales Contract #533032), dated September 19, 2008 | ||
Parties:
|
Phoenix Coal Corporation (guarantor), Charolais Mining Company., LLC (Obligor), and Whayne Supply Company (Seller) |
Limited Guarantee (to Installment Sales Contract #533032), dated September 19, 2008 | ||
Parties:
|
Phoenix Coal Corporation (guarantor), Charolais Mining Company., LLC (Obligor), and Caterpillar Financial Services Corporation |
Installment Sales Contract #533033, dated September 19, 2008 | ||
Parties:
|
Charolais Mining Company, LLC (Buyer) and Whayne Supply Company (Seller) |
Guaranty of Payment (to Installment Sales Contract #533033), dated | ||
September 19, 2008 | ||
Parties:
|
Phoenix Coal Corporation (guarantor), Charolais Mining Company., LLC (Obligor), and Whayne Supply Company (Seller) |
Installment Sales Contract #536249, dated October 20, 2008 | ||
Parties:
|
Schoate Mining Co., LLC (Buyer) and Whayne Supply Company (Seller) |
Guaranty of Payment (to Installment Sales Contract #529232), dated October 30, 2008 | ||
Parties:
|
Phoenix Coal Corporation (guarantor), Schoate Mining Co., LLC (Obligor), and Whayne Supply Company (Seller) |
Installment Sales Contract #496985, dated November 20, 2007 | ||
Parties:
|
Schoate Mining Co., LLC (Buyer) and Whayne Supply Company (Seller) |
23
Guaranty of Payment (to Installment Sales Contract #496985), dated November 20, 2007 | ||
Parties:
|
Phoenix Coal Corporation (guarantor), Schoate Mining Co., LLC (Obligor), and Whayne Supply Company (Seller) |
Collateralized Guaranty of Payment (to Installment Sales Contract #496985), dated | ||
November 20, 2007 | ||
Parties:
|
Phoenix Coal Corporation (guarantor), R&L Winn, Inc. (Obligor), and Whayne Supply Company (Seller) |
Installment Sales Contract #496996, dated November 20, 2007 | ||
Parties:
|
Schoate Mining Co., LLC (Buyer) and Whayne Supply Company (Seller) |
Guaranty of Payment (to Installment Sales Contract #496996), dated November 20, 2007 | ||
Parties:
|
Phoenix Coal Corporation (guarantor), Schoate Mining Co., LLC (Obligor), and Whayne Supply Company (Seller) |
Collateralized Guaranty of Payment (to Installment Sales Contract #496996), dated | ||
November 20, 2007 | ||
Parties:
|
Phoenix Coal Corporation (guarantor), Schoate Mining Co., LLC (Obligor), and Whayne Supply Company (Seller) |
Installment Sales Contract #497012, dated November 20, 2007 | ||
Parties:
|
Charolais Mining Company, LLC (Buyer) and Whayne Supply Company (Seller) |
Guaranty of Payment (to Installment Sales Contract #497012), dated November 20, 2007 | ||
Parties:
|
Phoenix Coal Corporation (guarantor), Charolais Mining Company, LLC (Obligor), and Whayne Supply Company (Seller) |
Collateralized Guaranty of Payment (to Installment Sales Contract #497012), dated | ||
November 20, 2007 | ||
Parties:
|
Phoenix Coal Corporation (guarantor), Charolais Mining Company, LLC (Obligor), and Whayne Supply Company (Seller) |
Installment Sales Contract #497416, dated November 26, 2007 | ||
Parties:
|
R&L Winn, Inc. (Buyer) and Whayne Supply Company (Seller) |
Guaranty of Payment (to Installment Sales Contract #497416), dated November 26, 2007 | ||
Parties:
|
Phoenix Coal Corporation (guarantor), R&L Winn, Inc. (Obligor), and Whayne Supply Company (Seller) |
24
Installment Sales Contract #498200, dated November 30, 2007 | ||
Parties:
|
Phoenix Coal Processing Company, LLC (Buyer) and Whayne Supply Company (Seller) |
Guaranty of Payment (to Installment Sales Contract #498200), dated November 30, 2007 | ||
Parties:
|
Phoenix Coal Corporation (guarantor), Phoenix Coal Processing Company, LLC (Obligor), and Whayne Supply Company (Seller) |
Installment Sales Contract #499935, dated December 11, 2007 (as amended) | ||
Parties:
|
Schoate Mining Co., LLC (Buyer) and Whayne Supply Company (Seller) |
Installment Sales Contract #500789, dated December 18, 2007 (as amended) | ||
Parties:
|
Phoenix Coal Processing Company, LLC (Buyer) and Whayne Supply Company (Seller) |
Guaranty of Payment (to Installment Sales Contract #500789), dated November 20, 2007 | ||
Parties:
|
Phoenix Coal Corporation (guarantor), Phoenix Coal Processing Company, LLC (Obligor), and Whayne Supply Company (Seller) |
Collateralized Guaranty of Payment (to Installment Sales Contract #500789), dated November 20, 2007 | ||
Parties:
|
Phoenix Coal Corporation (guarantor), Phoenix Coal Processing Company, LLC (Obligor), and Whayne Supply Company (Seller) |
Installment Sales Contract #501540, dated December 21, 2007 (as amended) | ||
Parties:
|
R&L Winn, Inc. (Buyer) and Whayne Supply Company (Seller) |
Guaranty of Payment (to Installment Sales Contract #501540), dated December 21, 2007 | ||
Parties:
|
Phoenix Coal Corporation (guarantor), R&L Winn, Inc. (Obligor), and Whayne Supply Company (Seller) |
Collateralized Guaranty of Payment (to Installment Sales Contract #501540), dated | ||
December 21, 2007 | ||
Parties:
|
Phoenix Coal Corporation (guarantor), R&L Winn, Inc. (Obligor), and Whayne Supply Company (Seller) |
Term Loan Note, dated April 1, 2008 | ||
Parties:
|
Schoate Mining Co., LLC. and Deere Credit, Inc.. |
Security Agreement - Equipment, dated April 1, 2008 | ||
Parties:
|
Schoate Mining Co., LLC. and Deere Credit, Inc.. |
25
Guarantee, dated April 1, 2008 | ||
Parties:
|
Schoate Mining Co., LLC., Phoenix Coal Corporation and Deere Credit, Inc.. |
Agreement for the Sale and Purchase of Coal, dated September 5, 2007 | ||
Parties:
|
Charolais Coal Sales Company, LLC and Duke Energy Kentucky, Inc. |
Coal Supply Agreement, dated January 1, 2007 | ||
Parties:
|
Charolais Coal No. 1, LLC, Charolais Coal Resources, LLC, Charolais Coal Sales Company, LLC and Louisville Gas & Electric Company, Kentucky Utilities Company |
Coal Supply Agreement, dated June 23, 2009 | ||
Parties:
|
American Coal Company and Charolais Coal Sales LLC |
Restated and Amended Coal Supply Agreement, dated August 1, 2007 | ||
Parties:
|
Charolais Coal Sales Company, LLC Phoenix Coal Corporation and Kentucky Utilities Company |
Coal Supply Agreement, dated December 31, 2007 | ||
Parties:
|
Western Kentucky Energy Corp. and Phoenix Coal Corporation, Charolais Coal Sales, LLC |
Coal Supply Agreement, dated March 16, 2006 | ||
Parties:
|
Western Kentucky Energy Corp. and WKE Station Two Inc., R&L Winn, Inc. |
Coal Supply Agreement, dated January 1, 2008 | ||
Parties:
|
Phoenix Coal Corporation and Duke Energy Ohio, Inc. |
Master Coal Purchase and Sale Agreement, dated November 30, 2007 | ||
Parties:
|
Charolais Coal Sales, LLC (buyer) and Covol Fuels No.2, LLC (seller) | |
|
||
Transfers/Assignments:
|
Neither party may assign without the prior written consent of the other party, which consent shall not be unreasonably withheld or denied; except a transfer of the agreement may be made without consent in connection with a financing arrangement OR to any person or entity acquiring all or substantially all of the assets of the Party where the acquiring party is equally creditworthy as the assigning party. |
26
Coal Mining Lease Agreement, dated November 4, 2008 | ||
Parties:
|
John K. (Kenny) Vaught, Lisa Michelle Vaught and R&G Leasing, LLC |
Surface Coal Mining Lease Agreement, dated May 31, 2007 | ||
Parties:
|
Tom Eubanks, Jeff Eubanks and Phoenix Coal Corporation |
Surface Coal Mining Lease/Sublease Agreement, dated January 26, 2006 | ||
Parties:
|
Tom Eubanks, Jeff Eubanks and Phoenix Coal Corporation |
Coal Representation Agreement, dated March 30, 2006 | ||
Parties:
|
Edmonson Fuels, LLC and R&L Winn, Inc. |
Coal Lease Agreement, dated June 7, 2006 | ||
Parties:
|
Anna Loraine Cundiff and R&L Winn, Inc. |
Coal Lease Agreement, dated February 28, 2008 | ||
Parties:
|
Anna Loraine Cundiff and R&L Winn, Inc. |
Strip Coal Mining Lease, dated October 20, 1967 | ||
Parties:
|
Sentry Royalty Company and Ayershire Collieries Corporation | |
|
||
Transfers/Assignments:
|
Section 21 permits assignment, but the lessee will not be released unless written consent of the lessor is obtained. |
Mineral Lease, dated December 4, 1947 | ||
Parties:
|
Talmage Rogers, et al. and Ayershire Collieries Corporation |
Assignment and Sublease Agreement, dated January 22, 2001 | ||
Parties:
|
Lynx, Inc. and Evergreen Mineral Company, Inc. |
Surface & Coal Lease Agreement, dated | ||
Parties:
|
Tom McDonald Heirs et al. and R&L Winn, Inc. |
Surface Mining Lease Agreement, dated July 31, 2004 | ||
Parties:
|
Billy & Patsy Kirtley and R&L Winn, Inc. |
Minerals Agreement, dated September 13, 2006 | ||
Parties:
|
Gerald A. Liles & Judith Ann Liles and Renfro Equipment, Inc. |
27
Surface Agreement, dated August 3, 2006 | ||
Parties:
|
Gerald A. Liles & Judith Ann Liles and Renfro Equipment, Inc. |
Coal Mining Lease Agreement, dated July 17, 2006 | ||
Parties:
|
Martha Rogers Haas, et al. and R&G Leasing, LLC |
Surface Coal Mining Lease/Sublease Agreement, dated September 7, 2006 | ||
Parties:
|
James H. Edwards and Renfro Equipment, Inc. |
Surface Coal Mining Lease/Sublease Agreement, dated August 3, 2006 | ||
Parties:
|
Gerald A. and Judith Ann Liles, Joseph P. Lilies and Renfro Equipment, Inc. |
Surface Coal Mining Lease/Sublease Agreement, dated August 24, 2005 | ||
Parties:
|
Geibel Lumber Co., Lydia Geibel by Jon Geibel and Jon Geibels Agent for the Geibel family and Renfro Equipment, Inc. |
Amendment to Surface Coal Mining Lease/Sublease Agreement, dated November 11, 2008 | ||
Parties:
|
Geibel Lumber Co., Lydia Geibel by Jon Geibel and Jon Geibel as Agent for the Geibel Family and Renfro Equipment, Inc. |
Mineral Coal Mining Lease, dated September 13, 2006 | ||
Parties:
|
Gerald A. and Judith Ann Liles, Joseph P. Liles and Renfro Equipment, Inc. |
Coal Mining Lease, dated April 15, 2003 | ||
Parties:
|
Virginia Avaneil McDonald, Douglas W. McDonald, Pam and Tommy Davidson, Pam Davidson, Keith and Mya McDonald, Greg and Suzie McDonald, Ron and Mona McDonald, Corinne Knight, Gary and Adelia McDonald, Jolene and James Walker, Jane and Doug Galyen, Brenda and Frank L. Coomer, Bobby D and Jennifer Whitson, Deborah W. and Joe Whitson, Bruce and Marilyn McDonald, Roger Neal and Donna McDonald, Barbara and Ray Newman, Peggy and Danny Grissom, Kevin and Sandra McDonald, Donald and Joanna McDonald, Wanda and Gene Luckett, Phillis A. and Yost Newman, Billy W. and Patsy Kirtley, and R&L Winn, Inc. |
Security Agreement, dated October 20, 2008 | ||
Parties:
|
Phoenix Coal Corporation and Brandeis Machinery & Supply Company (as assigned to Komatsu) |
28
Security Agreement, dated October 20, 2008 | ||
Parties:
|
Phoenix Coal Corporation and Brandeis Machinery & Supply Company (as assigned to Komatsu) |
Security Agreement, dated December 1, 2008 | ||
Parties:
|
Schoate Mining Co., LLC and Komatsu Financial Limited Partnership |
Security Agreement, dated February 16, 2009 | ||
Parties:
|
Schoate Mining Co., LLC and Brandeis Machinery & Supply Company (as assigned to Komatsu) |
Security Agreement, dated February 16, 2009 | ||
Parties:
|
Schoate Mining Co., LLC and Brandeis Machinery & Supply Company (as assigned to Komatsu) |
Coal Lease and Mining Agreement, dated December 2, 2005 | ||
Parties:
|
Terry Adkins and Renfro Equipment, Inc. |
Surface Coal Mining Lease/Sublease Agreement, dated May 30, 2001 | ||
Parties:
|
Hilltop Haven, Inc. and Renfro Equipment, Inc. |
Coal Lease and Mining Agreement, dated August 26, 2005 | ||
Parties:
|
Gon Kevin Huh and Renfro Equipment, Inc. |
Surface Coal Mining Lease/Sublease Agreement, dated June 25, 2007 | ||
Parties:
|
Richard T. and Tonya L. Williams and Renfro Equipment, Inc. |
Surface Mining Lease Agreement, dated October 23, 2003 | ||
Parties:
|
Bobby and Jonnie Dukes and R&L Winn, Inc. |
Surface Mining Sublease Agreement (of Taylor Lease to the Dukes), dated October 20, 2006 | ||
Parties:
|
Bobby and Jonnie Dukes and R&L Winn, Inc. |
Surface Mining Lease Agreement, dated May 24, 2006 | ||
Parties:
|
John Wesley Horn and R&L Winn, Inc. |
Surface Mining Lease Agreement (Multiple Leases for Various Properties), dated | ||
October 23, 2003 | ||
Parties:
|
Majorie Dukes and R&L Winn, Inc. |
29
Surface Mining Lease Agreement (Multiple Leases for Various Properties), dated | ||
December 22, 2003 | ||
Parties:
|
W. Edwin and Exie Bandy and R&L Winn, Inc. |
Surface Mining Lease Agreement, dated January 13, 2004 | ||
Parties:
|
Kenneth R. Dukes and R&L Winn, Inc. |
30
31
32
33
CONSOLIDATED FINANCIAL STATEMENTS PHOENIX COAL CORPORATION 4 SUBSIDIARY December 31,2006 |
PHOENIX COAL CORPORATION & AFFILIATES Table of Contents December 31,2006 Independent Auditort Report 1 Consolidated Financial Statements Balance Sheet 2 Statement of Operations 3 Statement of Stockholdera Equity 4 Statement of Cash Flows 5 Notes to Financial Statement 6 |
Mountjcy & Bressler INDEPENDENT AUDITORS REPORT To the Board of Directors Phoenix Cod Corporation & Subsidiaries We have audited the accompanying consolidated balance sheet of Phcsnfic Coal Corporation & Subsidiaries aj of December 31, 2006 and the related consolidated statements of operations, stockholders equity and cash flows for the year then ended. The consolidated financial statements are the responsibility of the Companys management Our responsibility Is to express an opinion on the consolidated financial statements based on our audit We conducted our audit In accordance with auditing standards generafly accepted In the United States of America Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the consolidated financial statements. An audit also Includes assessing the accounting principles used and significant estimates made by management as well as evaluating the overall financial statement presentation. We befievo that our audit provides a reasonable basis for our opinion. in our opinion, the consoldatad financial statements referred to above present fairly. In ai material respects, the financial position of Phoenix Coal Corporation & Subsidiaries as of December 31,2008 and the results of their operations and cash flows for the year then ended in conformity with accounting principles generally accepted in the United States of America Louisvlle, Kentucky April 30,2007 mountjoybr* ktr.com 2300 WMartomt Pta« 175 East Main Street, SuMe 200 Th« trim Mansion ISOflynn Avenue, SuHalOO 335 W Main S«r**» Loington, Kentucky 40507 «0S Citrard Stiaat P.O. Bwittt loulnlVc. Xcfltucky 40202 Covinpon, Kentucky 41411 Frankfort, Kentucky 40601 1502) 992-1700 (859)155-4950 (459)431-1975 (502)227-9000 (502) 992-4700 fire (859) 2SS-2S7S fu UBS) 431-7771 fix (502) 227-9400 fa* An tndewndtnl Member of Bator TIty intwntficoal |
PHOENIX COAL CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEET December 31,2008 ASSETS Current Assets Cash and equivalents $8,307,088 Restricted cash 1,697,038 Investments 713,077 Trade accounts recefvable 1,582,136 Accounts receivable other 203,365 Coal Inventories 256,383 Prepaid expanses and other current assets 246.119 Total current assets 13,005,214 Property, Plant and Equipment, net 13,397,672 Goodwill 9,927,059 Other Intangible Assets, net of accumulated amortization of $26,272 462,787 Other Assets 1.623.240 S 38.415.972 See accompanying Independent auditors report and notes to balance sheet |
LIABILITIES AND STOCKHOLDERS EQUITY Current Liabilities Trade accounts payable and accrued liabilities $3,505,762 Current portion of long-term debt 3.31 Mg2, Total current liabilities 3,821,184 Reclamation liability 1,538,948 Lons-Term Debt, less current portion $3,315.422 14,044,163 Cthertong4erm liabilities 2,188,271 Stockholders Equity Common stock, $.001 stated value per share, 55,000,000 shares euthorized, 38,392,687 shares Issued and outstanding 38,393 Additional paid-in capital 21,051,649 Accumulated otter comprehensive loss (143,858) Accumulated deficit (7,118,7781 13,328,406 ?, 36,415,978 |
PHOENIX COAL CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENT OF OPERATIONS Year ended December 31,2006 Coal sales $16,276,283 Cost and Expenses: Cost of coal sales 14,348,085 Selling, general and administrative expenses 5,132,864 Depreciation and amortization 677.825 Loss from operations (3, B82,301) Other Income (Expense) Interest expense (1,102,999) Interest Income 30,960 Other, net (66.4381 ... (1.138,475) Loss before income tax expense {5,020,776) Income Tax (Benefit) Zm___See accompanying independent auditors report and notes to consolidated financial statements |
PHOENIX COAL CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENT OF STOCKHOLDERS EQUITY For the year ended December 31,2006 Accumulated Additional Other Common Stock Paid-in Comprehensive Accumulated Shares Dollars Capital Income Deficit Total December 31,2003 14,190,000 $14,190 $3,360,310 $ $ (2.098,002)3 1,276,498 Capital contribution 22,202,667 22,203 t7,044,115 - 17,658,318 interest rate swap (143,858) (143,858) Share-based Compensation - 47,224 - 47,224 Netloas : ^___= -___(§,020,776) ($.02,0,771?) December31,2006 36,332,667 I 3MM «1.051.648 £ CL&S221 ¥ (7,113,778) m«ff.4W See accompanying Independent auditors report and notes to consolidated financial statements |
PHOENIX COAL CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENT OF CASH FLOWS . Year ended December 31,2006 Cash Flow From Operating Activities Net I0SS $ (5,020,778) Adjustments to reconcile net loss to net cash used In operating activities: Depreciation and amortization 677,625 Loss on sale of property and equipment 148,686 Deferred tax provision Share-based compensation 47,224 In-kind Interest 179,192 Write off on license agreement 187,500 Changes in operating assets and liabilities: Accounts receivable (163,267) Inventories (266,383) Prepaid expenses and other assets 20,464 Trade accounts payable, accrued liabilities and other liabilities 741.623 Net cash used In operating activities (3,438,232) Cash Flow From Investing Activities Restricted cash (1,697,038) Investments (713,077) Payments for other assets principally mine development (1.433,147) Payments for property and equ^sment (1,024,018) Acquisition (13.610.1381 Net cash used In Investing activities (18,477,419) Cash Flow From Financing Activities Principle payments on long-term debt (3,147,149) Proceeds from long-term debt 15,839,958 Financing fees (489,059) Net proceeds from capital contributions 17.666.31 a Nat cash provided by financing activities 28.870.068 Net Increase In Cash and Equivalents 7,954.417 Cash and Equivalents, Beginning of Year 352.679 Cash and Equivalents, End of Year s fi.307.P9B Supplemental Disclosure: Interest paid * 91Q 797 See accompanying independent auditors report and notes to consolidated financial statements |
PHOENIX COAL CORPORATION & AFFILIATES NOTES TO FINANCIAL STATEMENTS December 31, 2006 NOTE A-NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Nature of Qperatlona: Phoenix is headquartered in Madisorwille, Kentucky with satellite offices in Champaign, Hinds and Louisville, Kentucky. The Company is engaged in the production and sale of steam coal to utilities and Industrial fuel consumers. Formed in July 2004 as a Delaware C corporation, the Company was originally named Dynamic Separations, Inc. (DSP). Principles of Combination: The Consolidated Companys consolidated financial statements include Phoenix Coal Corporation and its affiliates, Schoate Mining Company, LLC, Crittanden County Coal, Inc. and R & L Winn, Inc. and Old Liberty Equipment Company and Evergreen Mineral Company, inc. AJ significant intercompany transactions have been elimfoated. Use of Estimates: The preparation of the consolidated financial statements in conformity with accounting principles generaly accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liaMWea and disclosure of contingent assets and liabilities at the date of the consoOdated financial statements and the reported amounts of revenues and expenses during Ihe reporting period. Actual results could differ from those estimates. Cash and Equivalents: For purposes of reporting cash flows, the Company considers all cash accounts that are not subject to withdrawal restrictions or penalties to be cash or cash equivalents. Accounts Receivable: Trade accounts receivables are recorded at the invoiced amount and do not bear interest. Customers are primarily Investment grade companies and quasi-governmental agencies. As a result, we have not experienced any instances of non-payment and do not currently maintain an allowance for doubtful accounts. Management monitors customers closely and will record an allowance if trade account balances become potentially uncoltectfble. Inventory: Inventory Is maintained on a perpetual basis. The Company uses an average cost per ton ranging from $21.85 to $25.22 on a clean coal basis. The Company accounts for parts inventory using the original cost on a first-in-first-out basis. Parts Inventory Is Included In other current assets. Property and Equipment: Purchased property and equipment are stated at cost. The Company provides for depreciation of the purchased depreciable assets on the straight-line basis with useful lives that range from 5 to 10 years. Depredation expense was $602,723 for the year ended December 31,2008. The cost of assets sold, retired or otherwise disposed of and the related allowance for depreciation are eliminated from the accounts and any resulting gafei or loss is included in operations. Expenditures for maintenance and repairs are charged to expense as incurred. Expenditures for major renewals and betterments that extend the useful lives of property and equipment are capitalized. Interest cost fs capitalized for qualifying assets during the period In which the asset Is being installed and prepared for its Intended use. Capitalized interest cost is amortized on the same basis as the related depredation. Interest costs capitalized were $48,082 in 2006. Consistent with Statement of Financial Accounting Standards (SFAS> No 144, Accounting for We Impairment or Disposal of Long-Lived Assets, the Company evaluates long-lived assets for Impairment and assesses their recoverabilfty based upon anticipated future cash flows. If facts ami circumstances lead the Companys management to believe that the cost of one of Its assets may be Impaired, the Company will reduce the carrying amount to fair value to the extent necessary. Continued |
PHOENIX COAL CORPORATION & AFFILIATES NOTES TO FINANCIAL STATEMENTS December 31,2006 NOTE A - NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES -CONTINUED Deferred Mine Coats: Deferred mine costs represent the costs incurred to prepare future mine sites for mining and are amortized over the Ufa of the mine sila Deferred mine expense for the year ended December 31,2008 was $471,825. Asset Retirement Costa: The Company follows Statement of Financial Accounting Standards (SFAS) No. 143, Accounting for Asset Retirement Obligations, which addresses accounting and reporting for obligations associated with the retirement of tangible long-lived assets and the associated asset retirement costs. For the Company, asset retirement obligation expense represents the systematic accretion and depredation of future mine reclamation costs, which Includes the costs to reclaim the land disturbed during the mining process and the removal of mine facilities, equipment, transportation and other support facilities. Asset retirement obligation expense is the depreciation of future mine reclamation costs as described above. Goodwin and Other Intangible Assets: Goodwill Is tested at least annually for Impairment in accordance with SFAS No. 142, GoodwW and Other Intangible Assets. Intangible assets are amortized over their respective useful fives on a straighWIne baslB. Deferred Financing. Fees: Deferred financing fees are amortized to interest expense over the life of the related loan. Unamorflzed deferred financing fees were $462,787 at December 31,2008. Prepaid Royalties Rights to leased coal lands are often acquired through royalty payments. Where royalty payments represent prepayments recoupable against production, they are recorded as a prepaid asset, and amounts expected to be recouped within one year are classified as a current asset. As mining occurs on these leases, the prepayment is charged to cost of coal sales. Revenue Recognition: Under SEC Staff Accounting Bulletin No. 104, Revenue Recognition, we recognize revenue when all of the following criteria are met: (1) persuasive evidence of an arrangement exists, (2} delivery has occurred or services have been rendered, (3} the sellers price to the buyer Is fixed or determinable, and (4) collectibiHty Is reasonably assured. In the case of coal we mine and sell, we negotiate a specific sales contract with each customer, which Includes a fixed-price per ton, a delivery schedule, and terms for payment Royalty Expense: The coat that the Company mines belongs to other entitles. The Company acquires the right to mine and sell the coal through various leases. These leases require the Company to pay a royalty to the owners of the land and the minerals being mined. Royalty expense for the year ended December 31, 2008 was $1,579,355. income Taxes: Deferred Income taxes are provided for temporary differences arising from differences between the financial statement and tax basis of assets and liabilities existing at each balance sheet date using enacted tax rates expected to be in effect when the related taxes are expected to oe paid or recovered. Continued |
PHOENIX COAL CORPORATION & AFFILIATES NOTES TO FINANCIAL STATEMENTS December 31,2006 NOTE A - NATURE OP OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES -CONTINUED Accounting Pronouncements: On January 1,2008, the Company adopted the Emerging Issues Task Force Issue No. 04-6, Accounting tor Stripping Costs to the Mining Industry (EfTF 04-6). EITF 04-8 appOes to stripping costs Incurred in tha production phase of a mine for the removal of overburden or waste materials for the purpose of obtaining access to coal that wiB be extracted. Under EITF 04-8, stripping costs incurred during the production phase of the mine are variable production costs that are included In the cost of inventory extracted during the period tie stripping costs are Incurred, As of January 1,2006, the Company adopted Statement of Financial Accounting Standards No. 123 (revised 2004), Shars«Based Payment (Statement No. 123R), which requires companies to measure compensation cost In the statement of Income for all share-based payments (Including employe* stock options) at fair value. Prior to the adoption of Statement No. 123R, the Company accounted for is stock options under the Intrinsic value method prescribed by Accounting Principles Board Opinion No. 25, Accounting for Stock Issued to Employes* CAPB25) and related interpretations, as permitted by Statement of Financial Accounting Standards No. 123, Accounting for Stock-Based Compensation , as amended by Statement of Financial Accounting Standards No. 148, Accounting, for Stack-Based Compensation -Transition and Disclosure (Statement No. 123*). The Company adopted Statement No. 123R using the prospective method. Under this method, compensation cost for share-based payments to employees Is based on their grant-date fair value from the beginning of the fiscal period in which the recognition provisions are first applied. Measurement and recognition of compensation cost for awards that ware granted prior to, but not vested as of, tha date Statement No. 123R was adopted are based on the same estimate of the grant-date fair value and the same recognition method used previously under Statement No. 123. The Company uses the Btacfc-Scholas option pricing model for its options to determine tha fair value. Statement No. 123R also requires the benefits of tax deductions In excess of recognized compensation cost to be reported as a financing cash flew, rather man as an operating cash flow. Prior to the adoption of Statement No. 123R, the Company accounted for its stock options under the intrinsic value method prescribed by APB 25 and related interpretations bs permitted by Statement No. 123. |
PHOENIX COAL CORPORATION 4 AFFILIATES NOTES TO FINANCIAL STATEMENTS December 31,2006 NOTE B-ACQUISITIONS In 2006, the Company made a series of acquisitions of coal production and reserves as follows: » Sohoate Mining Company Company acquired stock of Evergreen Mineral Co. and Old Liberty Equipment Co., each of which owned 50% of Schoate, in June 2006. Consideration included cash, assumption of liabilities and $400,000 in common stock of ttie Company. R&L Winn Company acquired stock and R&L Wlrwi in July 2006. Consideration included cash and assumption of ffabiRUes. * Taylor famify assets Company acquired stock and assets of Taylor family holdings Including Crrttenden County Coal in July 2008. Consideration Included cash and assumption of UabSftles. The fair values of assets acquired and nabrfibes assumed at the acquisition date are as follows: Schoate R&L Taylor Mining Wing Property Total Current assets $3,417.202 3 131,387 $6,674 5 3.555,733 Property and Equipment 8,071,115 1,289.200 2,604,207 9,844,522 Reserves 250,000 150,000 400,000 Goodwill 8,150,421 673.322 2,873,055 9,696,798 Assumed Liabilities t3.S88.7551 (528,156) (3,860.934) r7.977.835t ? 12.049.gg3 ? 1,796,233 1 1,773,013 S 15,612,2,19 The accompanying consolidated financial statements induce operations of the subsidiaries from the date of acquisition through December 31,2006. NOTE CPROPERTY AND EQUIPMENT, NET Property and equipment consists of the following as of December 31,2006: Land $2,026,968 Building and Improvements 25,424 Preparation plant 1,214,697 Mining equipment 10,564,757 Office equipment 195,962 Vehicles 91.36 ft 14,119,173 Less accumulated depreciation and amortization (721.601) $13,397672 |
PHOENIX COAL CORPORATION & AFFILIATES NOTES TO FINANCIAL STATEMENTS December 31,2006 NOTE D-DEBT Tha Company has a 52 million secured rfne-of-credlt agreement with Fifth Third Bank for working capital purposes. The line-of-credit Is collaterallzed by all general business assets of Phoanix Coal Corporation, including but not limited to aD equipment now owned and hereafter acquired, accounts receivables and inventory. The line bears Interest at he Libor rate plus 2.72%. The Company had no outstanding balance on the llne-of-credit at December 31, 2006. Under the debt agreement, the Company Is subject to certain debt covenants. As of December 31,2006. the Company was in compliance with all debt covenants or received a waiver, in April 2007, the line of credit was amended to Increase the available Una to $3.4 million and increase interest to libor to 4%. In December 2006, the Company received a $500,000 advance as part of a bridge financing agreement associated with an acquisition completed in January 2007. The advance was repaid In January 2007 and reissued as part of the full bridge financing of $3.5 milKon (See Note K). Long-term debt at December 31,2006 consisted of the fotfowlng; Note payable to bank of $41,667 plus Interest starting January 2007 with interest at Libor plus 2.75% (8,1% at December 31, 2006}. Payments are made In monthly installments. The loan is collaterallzed by all assets and has a maturity date of December 2011. $1,339,058 Equipment notes payable, interest at 6.22%. Payments are made in monthly Installments. The loan is coBateraBzed by related assets and has maturity dates through June 2008. 1,157,017 Note payable to bank with interest at Libor plus 2.75%, Monthly payments of $116,667 plus interest beginning January 2007. Loan is collaterallzed by substantially all assets and has a maturity date of December 2011. 7,000.000 Subordinated note payable MVC Capital with Interest payable quarterly at 15% per annum. Interest in excess of 10% to be rolled into principal Holder has option on June 8, 2007 to convert Interest to shares or common stock at defined value with same option June 2008. 7,179,192 Advance on bridge financing (see above) 500,000 Advanced coal purchase, repayable monthly through December 31,2007, interest at 2.8% 183.418 17,369,583 Less: current maturities f3.3lS.42ft IHW.1W Expected maturities of notes payable are as follows: 2007 $3,315,422 2.325,017 1,739,950 1,400,000 8,679,199 ill7 i?ngi5u3 Continued |
PHOENIX COAL CORPORATION & AFFILIATES NOTES TO FINANCIAL STATEMENTS December 31.2008 NOTE D-DEBT - Continued in 2006,the Company entered into an Interest rate swap transaction whereby the interest payments on a notional dollar amount of $7 million are converted to a fixed rate of 8.10% compared to a variable rate of UBOR remeasured on a quarterly basis. The swap agreement Is tor 6 years expiring December 2011. The Company has designated this agreement as a cash flow hedge. The value of the derivative as of December 31, 2005 amounted to $143,858 and the related liability Is included in accounts payable and accrued liabilities. NOTE E-4NCOME TAXES The components of the Income tax expense are: Current $ Deferred s___S i A reconciliation of differences between the statutory U.S. federal Income tax expense (benefit) and the Company1 s effective tax benefit follows: U.S. statutory rate $ (1,691,532) State taxes, net of federal benefit Permanent items (94,178) Valuation allowance 1.785.71Q Income tax expense t The income tax expense attributable to discontinued operations presented on the consolidated statement of operations Is reflective of statutory tax rate as differences noted above were attributable to continuing operations. The expense for Income taxes includes federal and state income taxes currently payable or receivable and those deferred or prepaid because of temporary differences between the financial statement and the tax basis of assets and liabilities. The Company records income taxes under the liability method. Under this method, deferred income taxes are recognized for the estimated future tax effects of differences between the tax basis of assets and liabilities and their financial reporting amounts based on enacted laws. The deferred tax assets and liabilities recognized in the consolidated balance sheet are comprised of the following: Deferred tax assets: Net operating loss carry forwards and tax credits $2,977,666 Share based cm mpensaton 18,900 Other 31.371 3,028,237 Deferred tax liabilities: Tax over book depreciation (1,228.559) 1,801,878 Valuation allowance fl.aoi.878i Net deferred tax ft Continued |
PHOENIX COAL CORPORATION & AFFILIATES NOTES TO FINANCIAL STATEMENTS December 31,2006 NOTE B-4NCOME TAXES Continued As a result of losses from operations, management has recorded a valuation allowance against the total deferred tax asset as they do not believe Ft Is more likely tfian not these assets will be realized. At December 31, 2006, the Company had available net operating loss carryforwards, to reduce future taxable income, of approximately $7,000,000. NOTE F-C0NCENTRAT1ONS For Ova year ended December 31, 2008, the Companys two primary customers comprised approximately 93% of coal sales. Accounts receivables due from the two primary customers were $960,795 at December 31,2006. NOTE C-COMIUUTMENTS AND CONTINGENT LIABILITIES In the normal course of business, the Company makes various commitments and Incurs certain contingent liabilities including Eabflltlea related to reclamation costs and financial obligations in connection w»» mining permits that are not reflected in the accompanying balance sheet The Company does not anticipate any material losses as a result of these transactions. According to KRS Chapter 350, the Company is required to post reclamation bonds to assure the reclamation work la completed Outstanding reclamation bonds totaled approximately $8 million at December 31,2006. The Company leases certain office space and mining equipment over long-term operating leases running through 2009. The office lease contains an automatic renewal on a monthly basis for an additional two years after the Initial term which has bean Included In the summary. Future minimum lease commitments as of December 31 under noncancalable operating leases are as follows: 2007 $1,154,640 2008 1,126,880 2009 334,620 2010 34.320 3 2,650,470 A significant amount of the Companys coal reserves are controlled ftrough leasing arrangements and non-cancellable royalty lease agreements under which future minimum lease payments are due. |
PHOENIX COAL CORPORATION * AFFILIATES NOTES TO FINANCIAL STATEMENTS December 31.2006 NOTE HCOM MON STOCK The Company has conducted four separate equity transactions (n which It issued common stock. Although each transaction was designated as a new series, the stock issued for each series was all common stock with the same rights and privileges. A summary of the transactions follows: Per Common Paid-in Shares Share Stock Caplt?) ipJa! Inittaf-Common 12,750,000 $ .19 $12,750 12,641,763 9 2,654,513 Series A 8,370,000 .50 8,370 4,176,630 4,185,000 Series B 9,170,000 .75 9,170 8,868,330 8,877,500 Series C 6.102.6B7 125 6.103 ,.7,622,231 7,628,334 3g.392.gg7 3 36383 21,308,954 21,345,347 Expenses (304,5291 (3Q4,g29) 821004.425 S2j.ft4Q.a-f 8, In January 2007, the Company completed the Series C transaction resulting In the issuance of an additional 831,440 shares and $1,039,300 fri proceeds. NOTE l-STOCK INCENTIVE PLAN The Companys Stock Incentive Man (the Incentive Plan) reserved 3,057,000 shares of the Companys common stock for awards to officers, other selected key management employees and members of the Board of Directors of the Company. The Incentive Plan provides the Board of Directors with the flexibility to grant either incentive or nonstatutory stock options (Awards). The Incentive Plan calls for the adjustment of shares awarded under the plan in the event of a split Stock options are generally subject to vesting provisions of 25% at the end-of-year one from the date of grant and then evenly over 48 months. The options are granted at a price equal to 100% of the fair value of the Companys common stock on the date of grant and have a ten year term. Information regarding stock option activity under the Incentive Plan follows for the year ended December 31,2006; Option Average Common Exercise Contract Shares Price , Ufo Options outstanding at January 1 2,250,000 $ .25 10 Granted 820,000 .50 10 Exercised Cancelled f25.0001 .50 Options outstanding at December 31 3.045.000 Options exercisable at December 31 1-383.628 8 .25, Continued |
PHOENIX COAL CORPORATION & AFFILIATES NOTES TO FINANCIAL STATEMENTS December 31,2006 NOTE 1-STOCK INCENTIVE PLAN Continued Compensation cost of stock option grants is recognized straight-line over the options vesting periods. Compensation expense related to stock options for the ysar ended December 31,2006 was $47,224. As of December 31, 2006, there was approximately $207,000 of unrecognized compensation cost related to the unvested stock options. The options fair value was determined using the Black-Schcles option pricing model. Expected vdafihUes are based on comparable company historical stock movement, and other factors. The cost relating to the stock-based compenaatton plans !s Included in selling, general and administrative expenses in the accompanying Consolidated Statement of Operations. Weighted average fair value per share of options granted $ .28 per share Assumptions (weighted average): Risk free interest rate 4.52% Expected dividend yield 0.0 Expected volatility 0.40 Expected life (in years) 10.0 NOTe J-RELATED PARTY TRANSACTIONS The Company regularly enters Into transactions with shareholders and/or affiliated entities that have some level of common ownership with the Company. A summary of the related party transactions and balances for the year ended and as of December 31,2006 follows; Sales $2,466 Expenses: Consulting fees 766,000 Rent 27,230 Miscellaneous 5,393 Accounts receivable 57,655 Accounts payable 16,464 |
PHOENIX COAL CORPORATION & AFFILIATES NOTES TO FINANCIAL STATEMENTS December 31,2006 NOTE K-SUBSEQUENT EVENTS In January 2007, the Company completed the following transactions; On January 2,2007, the Company completed an asset and stock acquisition agreement related to CharWais Corporation and related entities for a total consideration of $21.7 million principally allocated as follows: Real property $600,000 Plant and equipment 14,000,000 Minerals 1,500,000 Goodwill 5,gCQ,pQQ, As part of the purchase transaction, the sailer provided financing amounting to $3.5 mfflton. The note accrued Interest at 8.75% and matured January 31,2007. The note was repaid through the proceeds of the bridge financing noted below. The Company also entered into a note with the seller amounting to $9.2 million with fixed rate of interest at 8.75%. The note matures June 30, 2007. The seller also received 434,640 common shares of Company stock at a $1.25 per share value as part of the transaction. In connection with the above acquisition, the Company entered into a new credit agreement on January 25, 2007 amounting to $4,135,600 denominated in Canadian dollars (approximately $3.5 minion in U.S. dollars). The note payable accrues interest at 12% per annum and is repayable on or before June 29,2007. In addition to the interest, the Company paid a bonus to the creditor of $262,500 which was payable with 210,000 shares of common stock at a value of $1.26 per share. |
INDEPENDENT AUDITORS REPORT lb the Board of Directors Phoenix Coal Corporation & Subsidiaries We have audited the accompanying consolidated balance sheets of Phoenix Coal Corporation & Subsidiaries (the Company) as of December 31, 2007 and 2006 and the related consolidated statements of operations, stockholders equity and cash flows tor the years ended December 31, 2007, 2006 and 2005. (See Note A), The financial statements are the responsibility of the Companys management Our responsibility is to express an opinion on the financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform die audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Companys internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the consolidated financial statements, assessing the accounting principles used and significant estimates made by management, as weU as evaluating the overall financial statement presentation. We believe tiiat our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, die financial position of Phoenix Coal Corporation & Subsidiaries as of December 31,2007 and 2006 and die results of then- operations and cash flows for the years ended December 31, 2007, 2006 and 2005 in conformity with accounting principles generally accepted in die United States of America. The accompanying financial statements have been prepared assuming that die Company will continue as a going concern. As discussed in Mote A to die consolidated financial statements, the Company has incurred a net Loss for fiscal years 2007,2006 and 2005 and had a working capital deficiency of $18,636,258 as of December 31, 2007. These conditions raise substantial doubt about its ability to continue as a going concern. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. Mounrjoy & Bressler lAP Louisville, Kentucky May 2, 2008 except for Note L as to which the date is June 13,2008. |
PHOENIX COAL CORPORATION & SUBSIDIARIES CONSOLIDATED BALANCE SHEETS December 31 2007 2006 ASSETS Current Assets Cash and equivalents $381,374 $8,307,095 Investments 153,100 713,077 Trade accounts receivable . 4314,385 1,582,136 Accounts receivable other 16,858 203,365 Coal inventories 1,072,697 256383 Prepaid expenses and other current assets 526,664 246,119 Total current assets 6,465,078 11,308,176 Property, Plant and Equipment, net 29,028382 13,397,672 Restricted Cash 2,312,500 1,697,038 Goodwill 32,393,227 9,927,059 Mine Development Costs, net of accumulated amortization of $210,658 in 2007 and $0 in 2006 1,464,831 471,825 Deferred Financing Flees, net of accumulated amortization of $54,545 in 2007 and $26,272 ul 2006 545,455 462,787 Other Assets 1,116,838 1,151,415 S 73,326,511 $38,415,972 UABHXTXES AND STOCKHOLDERS EQUITY Current Liabilities trade accounts payable and accrued liabilities ,,... $8,896,898 $3,505,762 Seller provided financing 7,794,000 Notes payable 6,072,240 Current portion of long-term debt 2338,198 3,315,422 Total current liabilities 25,101,336 6,821,184 Reclamation liability , 3,757353 1,536,948 Long-Term Debt, less current porlion 7,348,915 14,044,163 Other long-term liabilities 707,796 2,188371 Stockholders1 Equity Preferred stock, cumulative and convertible $.001 stated value per share, 40,000,000 shares authorized, 37,190,267 shares issued and outstanding 37,191 Common stock, $.001 stated value per share, 105,000,000 shares authorized, 37,701,440 shares in 2007 and 345392,667 shares in 2006 issued and outstanding 37,701 36,393 Additional paid-in capital 67,984,236 21,051,649 Accumulated other comprehensive loss (143358) Accumulated deficit (31,648,017) (7,118,778) 36,411,111 13,825,406 $73326^11 $38,415,972 See accompanying independent auditors report and notes to consolidated financial statements |
PHOENIX COAL CORPORATION & SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS For the Years Ended December 31 2007 2006 2005 Coal sales $67,184,104 $16,276,283 $92^40 Cost and Expenses: Cost of coal sales 62,175,073 14,348,095 849,473 Selling, general aad administrative expenses 14,920,851 5,132,864 970,660 Depreciation and amortization 3,143,365 677,625 55,353 Goodwill impairment 2,873,055 ¦ 83,112344 20,158,584 1,875,486 Loss from operations , (15,928,240) (3,882^01) (1,782,646) Other Income (Expense) Interest expense, including financing Eee amortization (5,044,174) (1,102^99) (1,599) Interest income 106,692 30,960 2^511 Foreign currency adjustment (498,794) Other, net.. . (1,816,730) (66,436) 12JK5 (7,253,006) (1,138,475) 12,967 Loss before income tax expense (23,181,246) (5,020,776) (1,769,679) Income Tax 70,155 Net loss 3(23,251,401) $(5,020,776) (1,769,679) Basic net loss per share $ (.63) $ (.20) $ (.14) Weighted average common shares outstanding 37,141,490 25,358,789 12,787,041 See accompanying independent auditors report ami notes to consolidated financial statements |
PHOENIX COAL COBPOHATION & SUBSIDIARIES CONSOLIDATED STATEMENTS OF STOCKHOLDERS EQUITY For the
years ended December 31, 2007,2006, and 2005 Accumulated ,, ^f^? ****. Pfoari Stock ru,,^1
Com^aivi Accumulated Sharea Dalian Sharei Dalian Capital Intonn Deficit Ibtal December 31, 2004
6,111,684 $6,112 $ $1,181388 $ $ (328323) $85*177 Capital contribution common stock 8,078316
8,078 . 2,178,922 2,187,000 Net low ___ (1,769,679) (1,769379) December 31, 2005
14,190,000 14,190 3,360,310 (2398302) 1,276.498 Capital contribution common stock 22302,667
22,203 17,6*4,115 17,666318 Interest rate swap (143,558) (14X858) Share-based
camperoarioii. . 47,224 47,224 Net loss (5,020,776) (5.020,776) December
31,2006 35392,667 $36,393 21,051^49 (143358) (7,118,778) l332Sj406 Capital contribution common
stock 1,591,440 1,591 1,987,696 1.989.2B7 Capital contribution preferred stock
36,207,600 36,208 43371,732 43,407,940 Common sharei converted to preferred share* (982,667)
(983) 982,667 983 Exercfceot stock options... 300,000 300 124,700 125300 Interest
rate swap 143,858 143,858 Share-fcased compensation option* .. 948359
948^59 Share-based compensation restricted sock 400,000 400 499,600 500300 OMdend»
- (U77338) (1.277,838) Net low (23351,401) (23,251,401) December 31,2007 37,701,440
$37,701 37,1901267 $37,191 $67,584,236 $ $(313*8317) $36,411,111 See accompanying independent
auditors report and notes to consolidated financial statements
PHOENIX COAL CORPORATION & SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS Far the Years Ended December 31 2007 2006 2005 Cash Flow Prom Operating Activities Net toss $(23051,401) $(5,020,776) J(l,769,679) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation and amortteation . 4,145,230 677,625 55053 Loss tm sale of property and equipment 1,810,138 148,686 Interest rate swap 224,686 Rsreign currency lass .. 81,227 Share-based compensation 1,448,859 47,224 Goodwill impairment 2073055 In-kind interest 350^300 179,192 Vfttte off on license agreement 187,500 Reclamation liability 1,244,438 Changes in operating assets sod liabilities: Accounts receivable (2045,742) (163,287) (117,524) Inventories (816,314) (256083) Prepaid expense* and other assets (280045) 20,464 (345) Trade accounts payable, accrued liabilities and other liabilities 5010,299 741,523 274,407 Net cash used in operating activities (9,406,060) (3,438032) (1057,788) Cash Flow Vtam Investing Activities Restricted cash (615,462) (1,697,038) Payments for investments 559,977 Proceeds from sales of investments (713,077) Payments tor Other assets principally mine development and mineral rights (1039042) (1,433,147) (250093) Proceeds from sale of property and equipment 6006073 (733,110) Payments for properly and equipment (1,549,511) (1,024,018) Acquisitions (31092,433) (13010039) Net cash used in invatin| tctbitla* (28030098) (18,477,419) (983003) Cash How From Financing Activities Principal payments on long-term debt (21,618,644) (3,147,149) (T6*3*7) Proceeds from long-terra debt 4,660,042 15039058 Proceeds from short terra nates 5,991,013 220,000 Payments on equipment financing (1,007,250) Financing toes (222032) (489059) Decrease in other long terra liabilities (580/482) Net proceeds from capital contributions 42,488,589 17,666318 2,187000 Net cash provided bj financing activities 29,711036 29,870068 2030,653 Net (Decrease) Increase In Cash and Equivalents (7,925,722) 7,954^17 (210338) Cash and Equivalents, Beginning <rf Kar 8007,096 352079 S63017 Cash and Equivalents, End of Year $381074 $8007096 $352079 Supplemental Dlsdcrans Intcrcstpaid $3,708,418 $910,797 $ t,599 Non-Cash Investing and financing Activities! ScOer provided financing of acquisition $7,794000 $ $ Seller provided financing for equipment purchases $10093081 $ $ Stock issued in connection with acquisition t S430QO $ $ Stock issued for financing fees , i 862000 $ S See accompanying independent auditors report and notes to consolidated financial statanents |
PHOENIX COAL CORPORATION & SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 3% 2007,2006* and 2005 NOTE A NATURE OF OPERATIONS AND SUMMARY O* SIGNIFICANT ACCOUNTING POLICIES Natum of Qpemtleru? Phoenix Cod Corporation & Subsidiaries (the Company) ii headquartered in Madlsoiwule, Kentucky with satellite offices in Ouunpaigb, Illinois and Loufsvflie, Kentucky. The Company is engaged in tho production and sale of steam coal to utUftiea and industrial fuel consumers. Formed en July 2004 at a Delaware C corporation, the Company was originally named Dynamic Separation*, Inc. (DST*). Principles of Consolidation; The Companys consolidated financial statements Include Phoenix Coal Corporation and its affiliates Scaoate Mining Company, (XQ R & L Winrt, Btcj Crtttenden County Coal, lie; Evergreen Mineral Company, lac; Old liberty Equipment Company, Inc; Maroon Sedamadoo IXC; Phoenix Coal Processing Company, LLQ Dynamic Separations, 1XQ Oiaralais Mining Company, LLQ Charolaia Coal Sale*, IXC and Pact Resources, IXC. Basis of Presentation: The Companys consolidated financial statements have been prepared on the going concern basis which contemplate* the realization of assets and liquidation of liabilities in the normal coarse of business. As shown in the accompanying financial statements, the Company ha* incurred net losses of $23,251,401, $5,020,776, and $1,769,679 for the year* ceding December 31, 2007,2006, and 200% respectively. The 03nroairy%curxoi«liab^ continue as a going concern Is dependent on managements ability to raise required funding through future equity issuances, asset sale* or a combination thereof and increase cash flow through improved operating results. Thtj» consoJidated fim^l stalenKntj tiq not iodude ajiy adjustments to the recoveiabUity and classification of recorded asset amount* and classification of liabilities that slight be necessary, should the Company be unable to continue a* a going concern. All monetary referent*! expressed herein are references to United States dollars. Use of Estimate* The preparation of the consolidated financial statements in conformity wit* accounting principles generally accepted in the United States of America requires management to reake estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and lUbmties at the dato rf the conMlidated financUl Jtaten^nB and ti»e report^ anwunta of revenues and expenses during the reporting period. Actual results could differ from those estimates. Cash and Equivakna: Ror purposes of reporting cash flows, the Company considers aU auh accounts that are not subject to withdrawal restrictions or penalties to be cash or cash equivalents. Account! Receivable: Trade accounts receivables are recorded at the Invoiced amount and do not bear Interest Customers are primarily investment grade companies and quasi-gOTommenlal agencies. As a result, the Company has not experienced any instances of non-payment and do not currently maintain an allowance tor doubtful accounts. Management monitors customers closely and will record an allowance if trade account balances become potentially uncollectible. hmtnlory; Inventory is maiatataed on a perpetual basis. The Company value* inventory at the lower of cost or market with cost determined using average cost per ton. Inventory values ranged from $21.99 to $29.02 and $2135 to $23XL In 2007 and 2006; respectively. These ranges are stated on a dean coal baste. The Company accounts for parts inventory using the original cost on a flrst-in-flrst-out basis. Parts inventory Is Included in other current assets. Properly and Equipment: Purchased property and equipment are stated at coat The Company provides tor depreciation of the purchased depreciable assets on the straight-line basis with useful lives that range from 3 to 10 years. Depredation expense for th e years ended December 31, 2007,2006, and 2003 were $2,652,542, $602,723, and $47,920, respectively. The cost of assets sold, retired, or otherwise disposed of and the reliited *Uowan« tor deprmation is eliminated frorn the accounts arid any resulting gain or loss is included in operations. Expenditures for maintenance and repairs are charged to expense as incurred. Expenditures for major renewals and beltermenta that extend the useful live* of property ami equipment are capitalized. Interest cost is capitalized for qualifying assets during the period In which the asset is being installed and prepared for its intended use. Capitalized interest cost is amortized on the same basis as the related depredation. Interest costs capitalized far the periods ended December 31,2007,2006 and 2005 were $0, $46,682 and $0, respectively. Consistent with Statement of Financial Accounting Standards (SFAS) No. 144, Accounting fir the Impairment or Disposal of Leng-ZJvcd Assets, the Company evaluates long-lived assets for impairment and assesses their reeoverabiUty based upon anticipated future cash flows. If tacts and circumstance! lead the Companys management to believe that the coat of one of its assets may be impaired, the Company will reduce the carrying amount to lair value to the extent necessary. Mine Development Costs Mine development costs represent the costs incurred to prepare future mine sites for mining and are amortized over the life of the mine site. Aa of December 31,2007 and 2006, the net book value of mine development costs included $882396 and $471,323, respectivery, attributable to properties where the Company was not currently mining and, therefore, the mine development costs were currently not being amortized. Mineral Reserves and Mining Righto: Mineral reserves and mining rights, which an included in Other Assets, are recorded at cost, or at fair value in the case of acquired businesses. As of December 31, 2007, the net book value of mineral reserves totaled S$89,434. This entire |
PHOENIX COAL C0RFOKATI0N & SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) December 31, 2007, 2006, and 2005 NOTE A NATURE 0* OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) amount is attributable to properties when the Company was not current]; engaged In mining operations and, therefore, the assets-were not currently being depleted. There were no mineral reserves recorded on the balance sheet at December 31,2006. Goodwill and Other faumgjbk Assets: Goodwill Is tested at least annually for impairment to accordance with SPAS No. 142, Goodwill and Other Intangible Assets. Intangible assets are amortized over their respective useful lives on a straight-line basis, to June 2007, the Company dosed itl OMteoden County Coal mining operation due to uneconomical mining conditions. As a result of the dosing, the Company deducted from its operating results goodwill impairment of 12373,(03 and unamortued mine development costs of $244,849. Deferred Financing Fees: Deferred financing fees are amortized to interest expense over the lire of the related loan. Unamortized deferred financing fees at December 31,3007 and 2006 were $545,453 and $462,787, respectively. Interest paid, as a supplemental disclosure on the Consolidated Statement of Cash Flows, includes cash paid for deferred financing fees. Prepaid Royalties Rights to leased coal lands are often acquired through royalty payments. Where royalty payments represent prepayments recoBpable against production, they are recorded as a prepaid asset, and amcnrnti effected to be recOTrwd within one year are classified a» a current asset. As mining occurs on these leases, the prepayment is charged to cost of coal safes. Ami Statement Obligation!: SH4S No. 143, Aecountrnj *» Asset Retirement ObRgattens (S7AS No. 14}) addresses financial accounting and reporting for obligations associated with the retirement of tangible long-lived asset! and the associated asset retirement costs, fhe Companys asset retirement obligation (AKO) liabilities primarily consist of spending estimates related to reclaiming surface bad and support faculties at both, surface and underground mioes in acconiaiwe widi fede^ and state redaraation Jaws as defined by each mining permit The Company estimates Its ARO liabilities fee final reclamation and mtae closure based upon detailed engineering calculations of the amount and tuning of the future cash spending for g third parry to pcrfonn the required work. Spending estimates are escalated for inflation and then discounted at the credit-adjusted risl-free rate. The Company records an ARO asset associated vdeh the discounted liability for fins! reclamation and nine closure. The obligation and corresponding asset are recognized in the period in which the liability is incurred. The ARO asset is amortized on the units-of-production method over its expected life and the ARO liability is accreted to the projected spending date. As changes m estimates occur (such as mine plan revisions, changes in estimated costs or changes hi timing of the performance of reclamation activities), the revisions to the obligation and asset are recognized at the appropriate credit-adjusted risk-free rate. The Company alio recognizes an obligation for contemporaneous reclamation uobUWes Incurred as a result of surface mining. Contemporaneous reclamation consists primarily of grading, topsoil replacement, and rovegetation of backfilled pit areas, A progression of the reclamation liability recorded on the balance sheet is as follows: 2007 2006 Balance at beginning of year $1,536,948 $ Acquisitions 821,000 1,514,443 Accruals 1,339,052 22^00 Accretion , 60,353 Balance at end of year $3,757,353 $1.536.948 Revtnus Recognition: The Company recognizes revenue when all of the following criteria an met (1} persuasive evidence of an arrangement exists, (2) delivery h as occurred or services have been rendered, (3) the sellers price to the buyer Is fixed or deterrnuiable, and (4) CQllcctability la reasonably assured. In the case of coal that Is mined and sold, a specific sales contract is negotiated with cash customer, which includes < feed-price per fern, a delivery schedule, and terms for payment Royalty Expense: The coal that the Company mines belongs to other entitle*. The Company acquires the right to mine and sell the coal through various leases, These leases require the Company to pay a royalty to the owners of the land and the minerals being mined. Royalty expense for the years ended December 31, 2007, 2006, and 2005 were $331,015, $841,391, and $0, respectively. Income Ttuet: Deferred income taxes are provided for temporary differences arising front differences between the financial statement and tax basis of assets and liabilities existing at each balance sheet date using enacted tax rates expected to Iwta effect when the related taxes are expected to be paid or recovered. Accounting Pronouncements On January 1, 2006, the Company adopted the Emerging Issues Task Force Issue No. 04-6, Accounting for .W«a^Ce^«iite.Ml»«i^.liiAuiry{EOT removal of overburden or waste materials for the purpose of obtaining access to coal that will be extracted. Under B3TF 04-6, stripping ousts incurred during the production phase of the mine are variable production costs that are included in the cost of inventory extracted during the period the stripping costs are incurred. |
PHOENIX COAL CORK>HATION & SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) December 31, 2007, 2006, and 2005 NOTE ANATURE OF OPERATIONS AND SUMMARY OT SIGN1IJCANT ACCOUNTING FOUCIES (Cwrtfautd) As of January 1,2006, the Company adopted Statement of Financial Accounting Standards No, 123 (revised 2004), Share-Based Payment (Statement No. 123R), which required companies to measure compensation cost in the statement of income for all share-based payment (including employee stock options) at fair value. Prior to tbs adoption of Statement No. 123R, the Company accounted for its stock optioni under the intrinsic value method prescribed by Accounting Principle* Board Opinion Ha. 25, Accounting for Stock. Issued to Employees (AFB 25) and related interpretation!, ax permitted by Statement of Financial Accounting Standard? No. 123, Accounting for Stock-Based Compensation, as amended by Statement of Financial Accounting Standard* No. 148, Accounting for Stock-Based Compensation. In June 2006, [be Financial Accounting Standards Board issued Interpretation No. 48, Accounting for Uncertainty in Income Taxes, an interpretation of FAS109, Accounting for Income taxes (FIN 46% to create a angle model to address accounting for uncertainty in tax positions. HN 4S clarifies the accounting for irtfx>meuxes\ representing a nunimn^ before beu^ reeojprfzed in Ihe finandal statements and penalties, accounting in Interim periods, dactosure and transidoaFm 48 is efeetivefw fiscal yeara The Company wm adopt FIN 48 m erf January l,2rx& as required Ttec^ earnings and other accounts as applicable. The Company does not expect the adoption of FIN 48 to materially impact the Companys financial positfon and results of operations. In September 2006, the FASB issued SEAS No. 157 Fair Value Measurementswhich enhances existing guidance for measuring assent and liabilities using tair value and requires additional disclosure about die use of fair value for measurement. The Stair ment is effective for financial statements Issued for fiscal yean beginning after November IS, 2007, and interim periods within those fiscal years. The Company has not yet evaluated the impact of SEAS No. 157. SPAS No. 159, The Fair value Option for Financial Assets and financial liabilitiesan anKsidmerit of SFAS Na 115 permits, but does not require, entities to measure many financial instrument* at fair value. The objective it to provide entitles with an opportunity to mitigate volatility In reported earnings caused by measuring related assets and liabilities differently without having to apply complex hedge accounting provisions. Entities electing this option will apply it when the entity first recognizes art eltgible instrument and will report unrealized gains and losses on such instruments in current earnings. This statement 1) applies to aD entitles, 2) specifies certain election dates, 3) can be applied on an inslrument-by-inslmment basis with some exceptions, 4) Is Irrevocable and 5} applies only to entire instruments. Demand deposit liabilities are explicitly excluded as qualifying for fata value. SFAS No. 159 is effective for financial statements issued fc* fiscal yeaisoeginuing after Nw^ election option that -would allow the Company to elect the fair value option for existing eligible items as of the beginning of a fiscal year that begins on or before November IS, 2007. The Company hat not early adopted SFAS 159 and does not expect the adoption of SFAS 159 to materially impact the Companys consolidated financial statements. In December 2007, the EASE issued Statement on Financial Accounting Standards No. 160, NoncontsvUing Interests in Consolidated Ftnanciai Statements, an amendment ofARB No. SI (Statement No. 160). Statement No. 160 requires that a Eonctmtroliing Interest (minority inte rest) in a consolidated subsidiary be displayed in the consolidated balance sheet as a separate component of equity. The amount of net income attributable to the noncatitroUing interest wDI be included in consolidated net income cm the face of the consolidated statement of income. Statement No. MO also Includes expanded disclosure requirements regarding the interests of die parent and its noncontroliftig interest. Statement No. 160 is effective for fiscal years beginning on or after December IS, 2008. Early adoption is not allowed. The Company is still analyzing Statement No, 160 to determine what the Impact of adoption will be. In December 2007, the FASB issued SFAS No. 141(R),ftafce» Combinations, which replaces SFAS No. 141. SFAS No. 141(R) significantly changes the principles and requirements for bow the acquirer of a business recognizes and measures in its financial statements the identifiable assets acquired, the liabilities assumed, and any noncontrolling interest in the aequiree. This statement also provides) guidance for the recognition and measures^ c^goodwul acquired fo a mnune^ that will enable users of the financial statements to evaluate the nature and financial effects of the business combination. This statement applies prospectively to business combinations for which the aexjuisidan date ii on or after tx« r»ginmng of the flrit annual rcrwiting period beginning on or after December IS, 2008. The Company is in the processof dcteririmm|uie effect, n* any, the adoption of SFAS No. 141(R) will have on its financial statements. In March 2008, the FASB issued FAS No. 161, Discloturcs about Derivative Iwtmmtm and Htdging Activities, (JAS 161) which is intended to Improve financial reporting about derivative instruments and hedging activities by requiring enhanced disclosures to enable investors to better understand their effects on an entitys financial position, financial performance, and cash flows. FAS 161 is effective for financial statements issued for fiscal years and interim r^riods begiiming after November 15, Z003. The Cornpany is currentry e^luattag the impact of FAS 161 on its consolidated financial statements. Redasttpcmiara: Certain amounts in 2006 and 2005 have been reclassifled to conform with current year presentation. The reclissiflcations had no impact on net loss or stockholders equity. |
PHOENIX COAL CORPORATION & SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) December 31, 20Q7, 2006, and 2005 NOTE B ACQUISITIONS In January 2007, the Company acquired assets and stock of die Charolais Corporation and related entities for a total cortsideratton of $21,924,000 principally allocated as follows: Real property $557,000 Plant and equipment , 13,483,000 Mineral* , l,542/)00 Goodwill W3C000 Redamatton Habffity (488/100) The purchase price paW to the seller was $21,735,000, including 434,6+0 common shares of the Company*! stock valued at $543/300. la addition, the Company incurred $189,000 of transaction costs related to the purchase. The purchase both expanded the Companys reserve base in the v&stem Kentucky markets, and increased sales volume with avail established utility. la October 2007, the Compare acquired the membership interests in Fact Rescourccs IXC (FACT) upon exercising its option in September 2007 pursuant to the option agreements dated September 7,2006 (the Option Agreements). Through the acquisition of FACE the Company controls the leases for the proposed Pratt Mine widiintheai^of interest as defined m the Option Agrocmcnts. The rtfOposed Pratt Mine contains both underground and surface coal totaling 33,833,000 tons of measured and indicated resources, 670/100 tons of inferred resources and 28,933,000 torts of proven and probable reserves. The Company has been carrying out development work on the proposed Pratt Mine since the fourth quarter of 2006 and is in the process of permitting the reserve. In addition to die leases for the proposed Pratt Mine, the selieri of FACT delivered to the Company the Sease for the Panama South property and, as a result, the in-place tons associated with the Panama South property are included in the calculation of the Scheduled Payment (as described below). The Panama Sooth property contains both underground and surface coal totaling 76^87,000 tons of measured and indicated resources. A further discussion of the Panama South property follows in thai Note. Per the Option Agreements, in addition to the scheduled payment for In-place tons of coal delivered by the sellers (the Scheduled Payment), which payment terms would be subsequently modified, the Company agreed to pay $300,000 (the Option Bee*) »t the effective date of the Option Agreements, an overriding royalty no greaterthan3%of the gros»sa!ra price per ton sold from the proposed Pfatt Mine (the Ofoxiding Royalty) and expenses related to the development of the proposed Pratt Mine during the option period (the Pratt Expense*)- Prior n> the closing of the acquisition, the Company and the seflen of PACT modified the original Option Agreements and entered into modificatlba of option EgrcementJ (the Modlflcatiun of Option Agreements). The Modification of Option Agreements stipulated that the Scheduled Payment was $15,000,009 payable in three instaUments, $10/100,000 of which was paid in 2007, plus a true-up payment of $0,10 per in-place ton on September 7,2008 for airy nd ditio^ tons of CoJ greater truml50XXXl,(XlOin-^ce tons that the sellers deliver. As of December 31,2007, the Company estimated that the sells* had already delivered 177,940,000 In-place tons of coal for a total Scheduled Payment of $17,794,000. As such, the Company recorded an additional $7,794,000 of Seller Provided Financing on the balance sheet due the former owners of PACT. Of this amoanr, $$£00/300 it payable in April 2008, with the balance due in September 200& As of December 31,2007, the Companys acquisition cost in EACT was comprised of the Option Fee, Pratt Expenses and the Scheduled Payment, which totaled $18#»/>00 (the Purchase Price). Option Fee $300,000 Pratt Expenses , 815/100 Scheduled Payment 17,794,000 $18,909,000 The Purchase Price was allocated as follows: Cash $3/X» Advance royalties 42,000 Land purchase option 75/300 Mine development 713,000 Qoodwai 18.076,000 $18,909,000 masmmmmmm |
PHOENIX COAL CORPORATION & SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) December 31,2007,2006, and 2005 NOTE B ACQUISITIONS COwUnDtd) Subsequent to December 31,2007, in Mitch 2008, the Company renegotiated certain mum of the Modification of Options Agreement and entered into a buy-out agreement with the farmer owner* of PACT (the Buy-oat Agttemear)- Pursuant to * public offering of the OoMpany"* shares or a private tale of more than 50ft of the Companys issued and outstanding stock or more than 50% of its asses (the MtrnttlsaflraEvwrl), the Company shall pay the former owner* of BftCT $25,000,000 within thirty days after the hfonetrzatioa Event (the Buy-out Payment), Bex the Buy-out Agreement, the Companys obligation to make a $3,000,000 payment is April 2003 and Ule balance of $2,794,000 in September 2008 shall be suspended until the occurrence of a Monetization Event Upon receipt of the Buy-out Payment, all obligations of the Company to make any additional payments, including the accrued amount of 57,794,000 on the balance sheet as of December 31,2007 and the Ovorridtag realty, shall cease and terminate. In lime, 2008, the Corop&ny and the former owners of PACT entered into an agreement to clarify and amend certain terms of the Buy-out Agreement The parties acknowledged and agreed that the reverse triangular merger shall qualify as and constitute a Moradmtion Event under the Buy-out Agreement. The parties a bo agreed to extend the data by which [he MoiwtteBUan Event must bo oonsummated under the Buy-out Agreement to a date that it fifty (SO) days from the dosing date rf tlwoffoing, so long as the Offering is closed on or before July 1, 2008. in die event the Monetization Event is the Reverse Triangular Merger, -die Buy-out Payment must be paid by the Company to the former owners of PACT within three (3) days of Marimba Capital Corp.* receipt of the escrowed proceeds (after deducting the agentsfee). If the Offering h not closed on or before July 1, 2QD8, then all obligations of the Company to make additional payments to the former owneis of PACT for the PACT properties shall be reinstated at that tune. Tn addition, if the Offering is closed on or before July 1,2008 but the Reverse Triangular Merger is not consummated on or before rtie^dayfoUowi^ the closing date of the Offering, then all obligations of the Company to make additional payments to the former owners of FACT for (he PACT properties shall be reinstated at that tine. At the acquisition date, the owners of PACT owned less than 1% of the total outstanding shares of the Company and also held 300,000 options to purchase common shares of the Company. The PACT purchase price was negotiated by members of senior management that had no financial ownership in PACT and was considered to be as arms4eagth transaction. The Company is currently fa the process of finalizing its valuation of the assets acquired and liabilities Hjoumed for tMa acquisition. In September 2007, the Company entered into a management and administrative services agreement with C&R Coal Inc. (CUT). Under the agreement, the Company operates and manages C&Rs Beech Creek South and Ebeneexer mines (the CSB. Mines). In consideration tor providing the sendees. Phoenix is entitled to retain ill revenues baa expenses generated by the operations of C&R at the C&R Mines, less $aw per ton paid to the owners of OfcR for each ton of coal sold from the CeaiMineSbSuwe the Cc«paBy does not own CAR, It does not consolidate its operating results, and records funds invested and services provided in other assets and accoontsreceiviiblo on it» balance sheet, which totaled $612,751 at December 31,2007. In December 2007, the Company entered into a lease with Peon Virginia Operating Go, IiX for the right to min e its Panama South property, located is Webster County, Kentucky, which contains both underground and surface coat totaling 76*287,000 tons of measured and indicated resources. In connection therewith, the Company paid s non-recoupsble fee of 5500,000. The lease outlines three terms: (1) the development term (the Development Term), from the effective date of the (ease until December 31, 2011; (2) the primary term (the Primary Tana), from the end of the Development Tkrm until the earlier of: (j) December 31, 2021, (if) the time at which the Company has mined and removed all leased coal, or (iff) termination of the lease; and (3) the remainder term, from the end of the Primary Term until the Company has completed reclamation, environmental and other obligations under the lease. The Primary Term can be renewed twice for a period of five years each. The Company Is required to pay a tonnage royalty for each ton of leased coal mined and sold, and a monthly minimum rental fee. Each months tonnage royalty w3l be credited against die monthly minimum remtal fee such that no minimum rental payment shall be due in any month when tonnage royalties equal or exceed die minimum rental The Company us also requited to pay a wheelaga fee for any coal mined from advene lands and transported through die leased premises. The Company must produce and ship no less than 500,000 toot of leased coal from the leased premise* during the calendar year ending December 31,2014 and during each calendar year thereafter, failure to da so will result in the payment of additional fees under the lease. In 2006, the Company made a series of acquisitions of coal production and reserves as follows: Scnoate Mining CompanyCompany acquired stock of Evergreen Mineral Co. and Old Liberty Equipment Co, each of which owned 50% of Scnoate, hi June 2006. Consideration included cash, assumption of liabilities and $400,000 in common stock of the Company. R&L WmnCompany acquired stock of R&L Wnn in July 2006. Consideration included cadi and asiumpttofl of liabilities. Taylor family assetsCompany acquired stock and assets of Taylor family holdings Including Crittenden County Coal in July 2006. Consideration included cash and assumption of liabilities. |
PHOENIX COAL CORPORATION & SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL S1&TEMENTS (Continued) December 31, 2007, 2006, and 2005 NOTE BACQUISITIONS (Continued) The fair values of assets acquired and liaMUtiet assumed at the acquisition date are as fellows: Scboate Taylor Mining R&LWina Properties Total CurrentasaeB $3,417,202 $131,857 $6,674 $3^55.733 Property and Equipment 6,071,115 1^69,200 2$MO07 9,944,522 Reserves 250,000 tfftOOQ 400,000 Goodwill 6,150421 673,322 2,873,055 9,696,798 Assumed LtaWIMei (3J3S8J35) (528,156) (3,860,924) (7,977,835) $12.049,983 $1,796323 $1,70,012 $15,619,218 The accompanying consolidated financial statements include operations of die subsidiaries from die date of acquisition through December 31, 2007. NOTK CPROPERTY AND EQWTMENT; NET Property and equipment consists of the following at December 31: 2007 2006 Land $599,654 $2,026568 Building and improvements 25,424 25,424 Preparation plant 1,476,805 WH697 Mining equipment 27.SS4J63 10,564,757 Loading and marine transport equipment 1,775,000 Office equipment 324*684 195,962 Vehicles 65,965 9U65 31,95235 14,119,173 Leu accumulated depredation and amortization (2,923,813) (721,501) $29,028482 $13,397.672 In November 2007, the Company sold certain assets and reserves to Covol for $i,230,0O0 in cash. The assets comprised a permit, lease, mobile equipment, a preparation plant and slurry reserves. Aa part of the agreement, the Company entered into a coal purchase and sale agreement to purchase the processed coal fines from Cowl tad a coal pivxs^lng a^eemenr Id enable the Company to temporarily wash iu coarse coal product at the preparation plant In addition to the Covol sale, the Company also sold noa-core n^ estate for grcra proceeds of $1,926,951, and other smaller, non-core assets such as mobile equipment during 2007. On a book basat, the Company incurred net losses of $1,810,138 related to the disposal of these asset*. NOTBB DE8T The Company has a $3.1 million secured linc-of-credlt agreement with Filth Third Bank for working capital purposes ($2 million at December 31,200Q. The line-of-credlt is collateral ized by all general busiiwis asseis of PhOranix Coal 0>rpc«tiOT (er»pt for the assets held by PACT and certain reserves held by Evergreen Mineral Company, Inc.), including but not United to all equipment now owned and hereafter acquired, accounts receivables and inventory. The line bean interest at the UBOR rate phis 4% (B.(50% at December 31,2007). The interest rate was LIBOR plus 2.75% at December 31, 2006. There was no outstanding balance on the Itne-of-credit at December 31, 2007 and 2006. Under die debt agreement, the Company is subject to certain debtcuveaants. As of December 31, ZQ07, the Company was in compliance with all debt covenants or received a waiver. In November 2007, the Company entered into a loan agreement with a finance company, acting as administrative agent for a syndicate of tenders, for $6,000,000 Canadian dollars (C$). The note is collaleraUied by, among other things, the assets of PACT, matures on October 31,2008, and bears interest at 12%. Interest on the note is paid monthly. The principal amount of the loan Is convertible, in whole or in part, by the lenders at the time of an initial public offering of securities of the Company, at a conversion price equal to 90% of the offering price. The value of the note is adjusted to U.S. dollars based on current exchange rates, and any adjustments are charged or credited to the statement of operations. The value of the outstanding loan was $6^rT2^40asof Decen*er31,2fl07. Asconsirkratiooforlhctoan, the |
PHOENIX COAL COBPOHATTON & SUBSIDIARIES NOTES TO CONSOLIDATE]) FINANCIAL STATEMENTS (Continued) December 31, 2007,2006, and 2005 NOTE D DEBT (Contimud) Company paid to the lenders a non-refundable $600,000 bonus in the Sana of 483,000 shares of common stock at a deemed price of 11.25 per share. (See Note L) In December ZOOS, the Company received a $500,000 advance at part of a bridge financing agreement associated with the Charolab acquisition completed in January 2)07. The advance was repaid la January 2007 and reissued as part of the full bridge financing of $4,135,600 denominated is Canadian dollar* (approximately 13 S mffltoa in U.S. dollars). The loan was repaid in August of 2007 resulting in a foreign currency transaction loss of approximately $418,000. Long-term debt consisted of the following >t December 31: axrr saw Note payable to bank with interest at LIBOR pins 2.75% (8-1% at December 31,2006). Payments of $41,667 plus interest starting January 2007 are made in monthly installments. The loan was coilateraOzed by all assets and was repaM in 2007. $ $ L339.958 Equipment notes payable, interest at 5.25% to 730%. Payments are made in monthly installments. The loans are eoUaterainsd by related assets with a net book value of $10,237,079 as of December 31,2007 and have maturity dates from June 2008 to November 2011 9^687,113 1,157,017 Note payable to bank with interest at LIBOR pros 175%. Monthly payments of $116,687 plus interest beginning January 2007. Loan was collateralized by substantially all assets and was repaid in 2007. .... 7,000,000 Subordinated note payableMVC Capital with interest payable quarterly at 15% per annum. Interest in excess of 10% to be rolled Into principal. Holder had option on June B, 2007 to convert interest to shares of common stock which was not exercised and amount was repaid in 2007, 7,179,192 Advance on bridge financing 500,000 Advanced coal purchase, repayable monthly through December 31, 3X37, Interest at 2,8% 183,418 9,687,113 17,359,585 Less: current maturities (2338,198) (3,315,422) 17348^15 tl4.044.163 Expected maturities of notes payable are as follows: 2007 2008 $1338,198 2009 1,955,253 2010 2,071,274 2011 1122,194 2012 1,200,194 $9,687,113 In 2006, the Company entered into an interest rate swap transaction whereby the interest payments on an original notional dollar amount of $7,000,000 are converted to a fixed rate of 8.10% compared to a variable rate of LIBOR re-measured on a quarterly basis. The notional amount decreases over the lire of the swap agreement, which expires in December 201L The notional amounts of the agreement were $5,483,333 and $7,000*000 at December 31,2007 and 2006, respectively. Under the agreement, the Company pays or receives the net Interest amount monthly, with the monthly settlements included in interest expense. In 200$ management designated the interest rate swap agreement as a cash flow hedging instrument, and determined the agreement met the requirements of the shortcut method under the provisions of Statement of Financial Accounting Standards No. 133. For 20D6, the agreement was recorded at its fair valua with subsequent changes in fair value included in comprehensive income. Is August, 2007, the debt to which Brit swap was related was retired. As a result, the amount previously recorded in other comprehensive income was charged to interest |
PHOENIX COAL CORPORATION & SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) December 31, 2007,2006, and 2D05 NOTE D DEBT (Continued) expense and soy future change* to the ftdr value of the swap will either increase or decrease interest expense as the contract no longer qualifies as an accounting hedge. The value of the derivative was $224,696 and $143,858 at December 31,2007 ami 2006, respectively and is included in accrued liabilities on the balance sheet NOTE E INCOME TAXES The components of the income tax expense at December 31 are: 2007 2006 1005 Current STD.ISS $ 4 Deferred , A reconciliation of differences between the statutory VS. federal income tax expense (benefit) and tie Company* effective tax benefit at December 31 are at follows 2007 2006 2005^ Federal and state taxes at statutory rate 5(8,934^67) $(1,691,532) 1(683,096) Permanent Items 58,325 (94478) 25,498 Valuation allowance 8,946^97 1,785,710 657,598 Income tax expense S 70,155 $ $ The expense far income taws includes: federal and state income taxes currently payable or receivable and those deferred or prepaid because of temporary diSerenees between the financial statement and tbe tax ba^ of aaeli and liabiU(ie4.TlBCbrapai^ records income taicei under the liability method. Under tMi method, deferred income tmw are recognized for the estiinated future ux effects of differences between the tax basis of assets and liabilities and their flnanctal leporttog amounts based on enacted laws. The deferred tax assets and BaollWes recognized is the consolidated balance sheet are comprised of the following at December 31: 2007 2006 Deferred tax assets: Net operating loss cany forwards and tax credits J 10,769,102 $2,977,666 Share based compensation 577,488 18,900 Reclamation Expense 491,431 Goodwill 928^16 Other 1.702 31,671 12,767,739 3,028,237 Deferred tax liabiliticr Mine Development Costa (54,693) lax owiboolc depredation (1,964,971) (1,226.359) (2£19,6S4) (1.22M59) 10,748,075 1,801,678 valuation allowance (10,748,075) (1,801.678) Net deferred tax t $ As a result of tosses from operations, management has recorded a valuation allowance against the total deferred tax asset aa they do not believe it is more likely than not these assets will he realized. Tne net change in valuation allowance for the current period is $8,946,397. At December 31,2007, the Company had available net operating joss (NOL) carry forwards, to reduce future taxable income of approximately |
PHOENIX COAL CORPORATION & SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) December 31, 2007,1006, and 2005 NOTE EINCOME TAXES (Continued) $28,000,000 expiring through 2028. The future benefit of these NOL carry forwards may b« limited on aa annual bask and in total undo Section 382 of the Internal Revenue Code depending on the extent of ownership change* contemplated by the Companys plan*. Net Operating Los* Carryovers (20 year carryover): toss Expiring In Amount 2004 2025 $304,900 2005 2026 1,860,275 2006 2027 5,088,854 2007 2028 19,645,199 $27,899,228 NOTE 7 CONCENTRATIONS For the year ended December 31, 2007 the Company*! three primary customers comprised approximately 89% of coal safci. Accounts receivablei due bom the three primary customers »t December 31,2007 were $2,285,240. Rsr the period ended December 31,2006, the Companys two primary customers comprised approximately 93%clcoal5aIe3. Amounts receivables due from the two primary customers at December 31, 2006 were $960,795. For the year ending December 31, 2005,100% of revenue was derived from one customer, NOTE G COMMITMENTS AND CONTINGENT LIABILITIES In the normal coarse of business, the Company makes various commitment! and incur* certain contingent liabilities including liabilities related to reclamation costs and financial obhgattara In connection with mining permits that are not reflected in the accompanying balance sheet The Company does not anticipate any material tosses as a [«uitof the« transactions. According to KRS Chapter 3S0, the CoropinyU required to post reclamation bonds to assure the reclamation work ij completed. Outstanding reclamation bonds totaled approximately $9 million at December 31,2007 and approximately $8 million at December 31, 2006. These bonds are secured by lettort of credit equal to the amount of the outsranding reclamation bonds. The letters of credit are collateralized by general business assets of the Company and the restricted cash on the balance sheet of $2312,500 and $1,697,038 at December 31,2007 and 2006, respectively. The Company leases certain office space and muting equipment over long-term operating leases running through 2010. Future minimum lease commitments under non-cancelable operating Isasu as of December 31, 2007, ate as follows: 2008 $1,092,570 2009 338,160 $M30,730 A significant amount of the Companys coal reserves are controlled through leasing arrangements and non-cancellable royalty lease agreements under which future minimum lease payments are due. As of December 31, 2007, the Company had committed to purchase $7,100,000 of mining equipment Sir its operations, with delivery scheduled during the first quarter of 2008. The equipment it being purchased to increase operating efficiencies at its surface coal mines. A series of notes with an equipment financing company will be used to finance the equipment, with estimated down payments of $500,000. The notes will be coilaterallzed by the equipment purchased. As of the audit opinion dais, the Company had completed the purchase of this raining equipment and executed five notes with two financing companies with toaa terras ranging from 30 to 48 months, interest rates of 525% to 841%, and total monthly payments of $187,000. In conjunction with the sale of certain assets to Covol, the Company entered into a master coal purchase and sale agreement (the Master Agreement) to purchase coal fines recovered and processed by CovoJ from two coal slurry reserves areas in Muhlenberg County, Kentucky defined in tin Master Agreement as the Rock Crusher Reserves and the National Guard Reserves (collectively, die Starry Reserve*"'). The term of the Master Agreement runs through the exhaustion of the Slurry Reserve (theTerm). For the remainder o« 2008, Covol shall u» itj commerdatly reaionablE efforts to produce from the Sluny Reserve* not less than 60,000 tool per month, but in any event shall produce and deliver not less than 20,000 tons per month. During the remainder of the Master Agreement Terra, Covol shall produce and deliver to the Company not less than 60,000 toni per month. The Company agrees that it will purchase from Covol, pursuant to die terms of the Master Agreement including certain BTU and quality speafications, all of the coal fines produced by Covol from the Slurry Reserves up to 60,000 tons per month during the Term. The price tor the coal lines shall be the contract price set forth in each confirmation attached to the Master Agreement, provided, however, that in no |
PHOENIX COAL CORPORATION & SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) December 31,2007, 2006, and 2005 NOTE G COMMITMENTS AMD CONTINGENT llABUJTiES (Continued) event shall the contract pries be lea than $2530 per ton for coal delivered from the Sock Crusher Reserve! or $2450 per toa for coal delivered from the National Guard Reserves. NOTE H COMMON AND PREFERRED STOCK COMMON STOCK The Company has conducted four separate equity transactions bi which it Issued common stock. Although each transaction was designated m new series, the stock issued for each series was all common stock with the sarae right* and privileges. A summsiy of the transactions follows: Far Common Paid-in Stares Share Stock Capital Total Initial Common 12,750.000 $.19 $12,750 $2,6*1,763 $2354313 Series A 8370,000 30 8370 4,176,830 4,185,000 Series B 9,170,000 .75 9470 6368330 6,877300 Series C 6,102,667 135 6,103 7,62231 7,62833* 36392,607 36393 21308^54 21345347 Expense* (304329) (304329) Balance as Of December 31,2006 36392,667 36393 21,004,425 21,040,818 2007 Activity: Series C 621,440 1.25 621 776,166 776,787 Stock issued for losn feet 970,000 155 970 1311330 1,212300 Common shares converted to preferred shares (982.667) 1.25 (983) (1^27,351) (1328334) Restricted stock issued 400,000 135 400 499300 500300 Optima exercised 300,000 .42 300 124,700 125,000 Balance as of December 31,2007 37,701,440 $37,701 $22.389,070 $22,426,771 PREFERRED STOCK In 2007, the Company conducted a preferred Stock offering; Preferred stock was issued in August 2007 and the proceeds used for working capital and the reduction of outstanding debt The hoJdexB at preferred stock have the rfghttotimtnumbcrof ¦votes equal to the number of share* of common stock issuabls upon conversion of the preferred stock. Subject to the restrictions of any credit facility as may then he in effect, the preferred stock pays a 6S% per annum cumulative dividend upon redemption or la common shores upon conversion. Based on these provisions, die accrued dividend has been reflected in the value of the preferred stock on the balance sheet Additionally, holders of Series C common shares could exchange one common share for One share of prtferred stock £or eveiy share of preferred stock purchased. Preferred stock can be converted by the holder at anytime to mmmon stock based on a conversion fonnulalncorporariiig the iisue price of the preferred stock and subsequent values of common stock. The preferred stock is converted automatically into common stock upon the dosing of an underwritten public offering of shares of the common stock of the Company or if the holders of a majority of the preferred slock consent to the conversion into common stock. Additkmaifc/, subject to various restrictions and the automatic and voluntary conversion provisions noted, commencing one yesr after lsstniice of tiie preferred stock, the holder may revest rede^ issue price ($1.25 per share) plus any unpaid dividends. Per Preferred Paid-in Shares Share Stock Capital Tbtal Preferred 36,207,600 $1.25 $36,208 $45,223,292 $45,259300 Issuance of warrants 462,800 462300 Common shares converted to preferred shares 982367 155 983 1,227351 1,228334 Dividend 1577,838 1,277338 Expenses ___ (3,592,198) (3392,198) Balance as of December 31,2007 37,190,267 $37,191 $44399,083 $44,636374 |
PHOENIX COAL CORPORATION & SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Contfnoed) December 3L 2007,2006, and 2B05 NOTE ISTOCK XNCEflTVE PLAN AND WARRANTS The Company"* Stock Incentive Plan (the Incentive Man) reserved 8,297,411 shares of the Ocnnpaiiys common stock for awards to officea, other selected key management employees and members of the Bond of Directors of the Company, The Incentive Han provide* the Board of Directors with tiie flexibility to grant either incentive or non-statutory stack options (Awards). The Incentive Fhui calls for the adjustment of shares awarded under the plan in the event of a split Stock option* an generally subject to vesting provisions of 25% at the end-of-year one from the date of grant and then evenly over the following 48 months. The option* are granted at a price equal to 10096 of the fair valucoftfao Compan/scomniDdsiock on the date of grant and have a ten-year term. Information regarding stock option activity under the Incentive Pfcui follows: Weighted Average Weighted Average Remaining Common Shares Exerdse Price Contractual Life Option* outstanding at January I, 2007 3,045JMQ $ .32 Granted 4,004,000 US Exercised (300,000) .42 Options outstanding at December 31,2007 6,749,000 $ .87 85 Options exerdsable at December 31,2007 2,609,050 $ .66 &5 Caah received from options exercised under ail share-based paymeatartangeasats for flw period ended December 31,2007 was $125,000. Compensation cost Of itock opticm grama is recognized straight-line over the options vesting period*, Compensation expense related to stock options for the years ended December 31,2007 and 2006 were $943,a59andM7,224,reape«lveiy.Aaaf December 31,2007, there was approximately $2,l£SiQ00 of unrecognized enmpenaation cost related to the unvested stock options to be recognized over a weighted-average period of 33 yearn. The options fair value was determined using the Black-Sctioles option-pricing model. Expected volatilities are based on comparable company historical stock movement, and other factor*. The cost relating to the stoci-based aampeMatfcm plans is Included in selling, general and administrative expenses in the accompanying Consolidated Statement of Operations. 2007 2006 2005 Weighted average fair value per share of options granted $.73 per share. $.29 per share $.15 per share Assumptions (weighted average): Risk-free loterestrate : 437% 4.52% 440% Expected dividend yield 0.00 0X10 040 Expected volatility , , 140 0.40 0.40 Expected option life (in years) , iQJOO 10.00 10.00 Prior to adopting SFAS No. 123R, die company applied APB Opinion No. 2S and related interpretations to account for its equity incentive plans. The following table reflects 2005 pro forms net income had connpwuation cost bera delennixied for the Companys ncawjualified and incentive stock options based on the fair value at the grant dates consistent with the methodology set forth under SEAS No. 123R; ZOOS Net loss As reported $(L769,6W) Pro forma (1,848,140) In December 2007, the Company issued 400,000 restricted shares to four of its directors. The share* were valued at $500,000 and the related expense is included in selling, general and administrative expenses. The shares cannot be sold uoless the Company doses a public offering of the Companys shares, or if the Company is sold to a third patty. As part of the fee structure related to the preferred stock offering in August 2007, the underwriter received warrants to purchase 1,780,000 shares of the prefaced stock of the Company at $1.25 per share. The warrants expire 24 months following the date, die Company consummates an initial public offering of shares of common slock of the Company. The warrants total value, of $462,800 was determined using the Black-Sdieles option pricing model. Assumptions used in t he model were ¦ risk free interest rats of 4.76%, dividend yield of &50%, and expected volatility of .40. The value of the warrants was charged to additional paid in capital. |
PHOENIX COAL CORPORATION & SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) December 31,2007, 2006, and 2005 NOTE J DEHMBO CONTRIBUTION PLAN The Company ha* a retirement savings but plan in effect for substanti^ all fuU-time employeo. Tbc Plan also coneiins a deferred salary arrangement under ISC Section Wl(k). Under the deferred salary arrangement, employees can contribute up to 100% of their earnings and the Company may match a portion of the employee contributions. The Company paid and charged to operations approximately $556,000, 593,000, and $0 for me yean ended December 31, 2007, 2006, and 2005 for Plan contribution*. NOTE K RELATED PARTY TRANSACTIONS The Company enters iota transaction* with stockholders and/or affiliated entities that have some level of common ownership with the Company. A summary of the related party transactions aad balances follows: 2007 2006 2005 Expense*: Consulting fee* $610,000 $765,000 $470,000 Bent and misceflnteowi 65,377 32,623 2JSS2 Accounts receivable 16,858 57,655 30357 Accounts payable 6,670 14484 These transactions were paid to MM Energy Partners, UUC, which amounts were applied towards, among other things, salaries, overhead and benefits for individuals who provided services. These transactions an also in the normal course of business, and are recorded at the consideration established and agreed to by the related parties. David Wiley and Timothy Fbgarty are managing directors of MHI Energy Partners, LLC ami both of whom, are currently directors of the Company. NOTE L SUBSEQUENT EVENTS In May 2008, tho Company modified Its loan agreement with the finance company, acting * administrative agent for t syndicate of lenders, that initially loaned the Company C$6 million in November 2007. The Company borrowed an additional CSS million (the Additional Loan), which together with the initial C$6 million, remain* outstanding as of die audit opinion date. The net proceeds of die Additional Loan after fees and converting to US doUars was $4,877,000. The term* mini conditions of the loan agreement are substantially the same except for the convtrefon price employed should the lenders exercise their right to convert the principal amount of the loan to common equity. The principal amount of the loan (including the iniUslioan, which WMamuided at the ume of the Additioaai Loan) (j convertible, in whole or in part, by the lenders at the time of an initial public ottering of securities of Phoenix or reverse takeover involving Phoenix (a Going Public Transaction) at a conversion price equal to 80% of the Going Public transaction offering price. As consideration tor the Additional Loan, the Company paid to the lenders a non-refundable $510204 bonus In das form of 408,163 shares of common stock at a deemed issue price of $125 per share. On June 13,2008, the Company and Quest, on behalf of each of the lenders, entered into an agreement pursuant to which, provided that no event of default has occurred and to continuing, (A) immediately prior to comptetiOT of the direet share ewJiange, expected ta occur on or before June 30,2008, the principal amount of the bridge loan will be fully converted into common stock or the Company at a conversion price of $1.25 per share of Gomroon Stock, such that upon conversion. Quest (or its designers) shall receive a number of shares of common stock equal to C$11,003,000 divided by $L2S (based on the Canadian dollar to United States dollar exchange rate at the time of the conversion), and (8) no adjustment to the number of bonus shares of common stock Issued in connection with the Bridge Loan wfll be required. The agreement is conditional upon, among other things, the offering dosing on or prior to July 2, 2008. Oil May 5,2008, Marimba Capital Corp. (MCC) and entered into a letter of inUnt pursuant to which the parties agreed to effect a reve rse triangular merger which wUI result in AcquisitionCo merging into the Company and the Company as tho surviving company wfll become a wholly owned subsidiary of MCC On May 22,2008, MCC, the Company and Ar^WtiwiCo entered into a c^nidve merger agreeroent with respect to such reverse triangular merger. On May 22, 2008, MCC also has filed a preliminary prospectus for an offering of Subscription Receipts (the Subscription Receipts), each Subscription Receipt to entitle the holder thereof to receive one unit (a Unit), each Unit consisting of one common sabre of MCC and one-half of one warrant of MCC subject to the satirfactton of certain conditions. MCC has applied to have the common shares and warrants lilted on the Toronto Stock Exchange (the TS2C). The Subscription Receipts have been offered to the public in si) of the provinces of Canada, except for Quebec, and in the United States in an offering exempt from the registration requirements of the UJS. Securities Act Subject to applicable law, the agents acting in connection with the offering have also offered the Subscription Receipts outside of Canada and the United States. The Offering consists of up to 62,857,160 Subscription Receipts at a price of $1.75 per Subscription Receipt to raise gross proceeds of C$110,000,030. In addition, the agents have been granted an over-eitotment option to acquire up to aa additional 15% of common shares of MCC and/or warrant* of MCC at price* of CSL62 and C$026, respectively (for as implied aggregate [nice per Unit of CSL75). Pursuant to an agency agreement among MCC, the Company and the agents, die Agents will receive a cash commission equal to 6% of the gross proceeds of the Offering plus compensation option* equal to |
PHOENIX COAL CORPORATION & SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS {Continued) December 31,2007, 2006, and 2005 NOTE L SUBSEQUENT EVICTS (Continued) 4% of (i) the Subscription Receipts icld pursuant to the offering and (3) the number of commas shares and warrants that equal a Unit issued pursuant to the over-allotment option. The proposed offering is subject to final regulatory approval. NOTE MDEFERENCES IN GENERALLY ACCEPTESJ ACCOUNTING PMNCHtES BETWEEW THE UNITED STATES AND CANADA The Company*! consolidated financial statements bib prepared in accordance with generally accepted accounting principle* 1a the United States. (US CAAF) which differ in certain respects from those principle* that the Company would have followed bad its consolidated financial statements been prepared in accordance with accounting principle* generally accepted in Canada (Canadian GAAJP). Tie major differences between US GAAP and Canadian GAAP and their effect on the M07 consolidated financial statements are as follows: The following table reconcile* the balance sheet amounts bi of December 31,2007 at reported under US GAAP with those amount* that would have been reported under Canadian GAAP; Canadi#n GAAP1 Canadian US GAAP Adjustment GAAP ASSETS Current Asset* Cash and equivalents $381,374 $ $381374 Investments 153,100 153,100 Trade accounts receivable 4314385 43M385 Accounts receivableother 16,858 15,858 Coal inventories 1372,697 Wt72,697 Prepaid expenses and other currant assets 526.664 526,664 Total caxreat iwti 6,465,078 6,455,078 Property Plant and Eqalpment, net 29,028382 29,028382 Restricted Cash 2312300 2312300 Goodwm 32^93,227 32393,227 Mine DereloBOunt Costa 1,464,831 1,464331 Deferred Financing Fees (a) 545,455 (545,455) Other Asset* 1,116338 1,116,838 $73326311 S (545,455) $72,781,056 LUmUHES AND STOCKHOLDERS EQUIT* Current liabilities Trade, accounts payable and accrued liabilities $8396398 S $8396398 Seller provided financing 7,794300 7,794,000 Preferred stock, subject to redemption provisions 4S3353S9 45,635369 Note* payable (a) 6,072340 (545^*55) 5326,785 Current portion of tang-term debt 2338,198 2,338,198 Total current llaWUtua 25,101336 45,089314 70,191,250 Reclamation UaWUlj 3,757,353 3,757,353 Long-Harm Debt, lest current portion 7348315 7348,915 Other long-tonn liabilities 707,796 707,796 Stockhold>r»i Equity Preferred stock (b) 37,191 (37,191) Common stock 37,701 37,701 Additional paid-in capital (b) 67384,236 (44,136382) 23347354 Accumulated other camprehensiva Ids* Aficumuiated deficit (b) (31,648,017) (1,461396). (33,109,913) Total Stockholders Eoeify 36.411.111 (45335,369) (9324358) j 73326311% (545.455) $72,781,056 |
PHOENIX COAL CORPORATION & SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) December 31, 2007, 2006, and 2005 NOTE M DIFFERENCES IN GENERALLY ACCEPTED ACCOUNTING PMNCIFCJES BETWEEN THE UNITED STATES AND CANADA (Continued) The following table reconciles the statement of operation j amounts for the year ended December SI, 2007 as reported under US GAAP with those amounts that woald have been reported under Canadian GAAP: 2087 NetLoM US GAAP $(23,25M01) Increased interest expense from dividends on redeemable preferred Hock (b) (1^277,838) Increased interest expense from feel on redeemable preferred stock (b) (1,461.896) Net LeaCanadian GAAP t(2S.991,135) (a) Deferred financing feel Under VS. GAAP, financing fees related to debt acquisition bib capitalized as an asset siid the fc« amortized over tha term of the debt and recorded at interest expense in the statement of operations. Canadian GAAP requires that these costs be recorded as a contra-liability and reduce the amount of the debt to which they are related. The financing fees are accreted and also recorded as interest expense. The reconciliation adjustments listed are to redassify deferred financing feet of $545,455 as a contra-liability on the balance (beet (b) Preferred stock with redemption rights As dfcqtmwi in Note H» in August 2007 the Company issued preferred stock that automatically converts to common shares upon the closing of an underwritten pubic offering. Additionally, subject to varxius reslrirtions, arid the autcraiatic inversion prcr/ision jioted, commencing one year after issuance, the preferred stock hoMef may request redemption of the preferred shares at its issue price plus any unpaid dividends. Although the preferred shares have a redemption feature, the redemption is conditional and subject to liquidity considerations. Based oa these and other characteristics of the preferred shares, under US. GAAP the proceeds front the sale of the preferred shares, less applicable expenses have been recorded as stockholders* equity. Due to the redemption features, Canadian GAAP requires the preferred shares to be recorded as debt Expenses related to the preferred offering are recorded as a contra-Uabtthy. The expenses are accreted using the effective interest ate method and recorded as interest expense. Any dividends due on the preferred shares are also included In interest expense. The reconciliation adjustments recorded are to rctlasslfy the preferred Shares as debt (344,173.473), accrete the expenses related to the oifering u interest expense ($1,461,896}, «ad redassify the dividends as interest expense (11^277,838). |
Phoenix Coal Inc. Consolidated Financial Statements December 31,2008 and 2007 |
REPORT OF INDEPENDENT REGISTERED CHARTERED ACCOUNTANTS To the Shareholders of Phoenix Coal Inc. We have audited the consolidated balance sheet of Phoenix Coal Inc. (the Company) as at December 31, 2008 and the consolidated statement of operations and comprehensive loss, shareholders equity and cash flows for the year then ended. These financial statements are the responsibility of the Companys management Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with Canadian generally accepted auditing standards. Those standards require that we plan and perform an audit to obtain reasonable assurance whether the financial statements are dee of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. In our opinion, these consolidated financial statements present fairly, in all material respects, the financial position of the Company as at December 31,2008 and the results of its operations and its cash flows for the year then ended in accordance with Canadian generally accepted accounting prfaciples. (signed) Ernst & Young LLP Louisville, Kentucky March 17,2009 |
INDEPENDENT AUDITORS REPORT To the Board of Directors Phoenix Coal Inc. We have audited the accompanying consolidated balance sheet of Phoenix Coal Inc. (successor to Phoenix Coal Corporation) (the Company) as of December 31, 2007 and the related consolidated statements of operations and comprehensive loss, shareholders* equity and cash tows for the year ended December 31, 2007 which have been prepared on the basis of accounting principles generally accepted in Canada, The financial statements are the responsibility of the Companys management Our responsibility is to express an opinion on the financial statements based on our audit We conducted our audit in accordance with auditing standards generally accepted In the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement An audit includes consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Companys internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the consolidated financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. In our opinion, the consolidated financial statements referred to above present feirly, in all material respects, the financial position of Phoenix Coal toe. (successor to Phoenix Coal Corporation) as of December 31, 2007 and the results of its operations and to cash flows for the year ended December 31,2007 in conformity with accounting principles generally accepted m Canada. lil Mountjoy & Bressler, LLP Louisville, Kentucky May 2,2008 |
PHOENIX COAL INC. CONSOLIDATED BALANCE SHEETS (Expressed in U.S. Dollars) As at December 31 Note 2008 Z0O7 ASSETS Current Assets Cash and cash equivalents ,,.. «.,, ,, ,, ,, $40,523,609 $381,374 Short-term investments -.- ___A 100,707 153,100 Trade accounts receivable ___2,843,134 4,314,385 Accounts receivableother... ,,...,, ,,...,, 16,858 Coal inventories ,, A 452,558 1,072,697 Prepaid expenses and other current assets.... ._. 470,506 526,664 Total current assets .... 44,392,514 6,465,078 Property, Plant and Equipment, net ~ E.K 46,037,904 29,028,582 Restricted Cash, Cash Equivalents and Certificate* of Deposit. K 11,638,921 2,312^500 Mining Rights, Mine Development Costs and Mineral Reserves, net of accumulated amortization of $3,670,570 in 2008 and $210,658 in 2007 A, D 52,582,655 34,547,492 Otter Assets . ...,, ,,_,.,,.._.. _...,,.,,,,,,._. -.. 492.520 427 404 $155,144414 $72,781,056 LUBILITIES AND SHAREHOLDERS EQUITY Current Liabilities Trade accounts payable and accrued liabilities S 6,470,390 S 8,896,898 Vendor financing ,..,,.,,. ,, ,, ,, ,, D 7,794,000 Preferred shares, subject to redemption provisions O 45,635,369 Notes payable _.,. .. O 5,526,785 Current portiofl of long-term debt ^.^ _.___G 6,532,045 2338,198 Current portion of asset retirement obligations ,, F 1,958,000 1,667,000 Total current liabilities -.-, 14,960,435 71,858,250 Asset Retirement Obligations, less current portion F 2^66,000 2,090,353 Long-term Debt, less current portion . .___O 14,641,745 7,348,915 Other Long-term Liabilities .. 482,743 707,796 Shareholders Equity Share capital.-.. « C, G 171,817,981 22,426,771 Stock options and warrants ,, - ___... L 16,625,724 1,458,884 Accumulated deficit (65.750.114) (33,109,913) 122,693,591 (9024.258) $155,144,514 S 72,781,056 See accompanying nates to consolidated financial statements Approved by the Board of Directors: Robert gush an (fflpigefl Director Robert Wardell Uigmd) . Director |
PHOENIX COAL INC CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (Expressed in U.S, Dollars) Far the Yean Ended December 31 Nate 1003 hot Revenue _» $76,724,270 $ 67,184,104 Cost and Expenses Cost of sales 71,881,533 62,175,073 Selling expenses ,, 8,188,945 7,859,571 General and administtathfe expenses L 13,545,412 7,06130 Depredation and amortization....,...,...,,. ,, ,, ___A 8,412,073 3,143,365 Asset impairment write down ....^.,, _., A 2,873,055 102,027,963 83,112344 Loss from operations -. (25,303,693) (15,928,240) Other Income (Expense) Interest expense, including accretion . G (5,767,496) (7,783,908) Interest income , ,, ,, ,, ___570,378 . 106,692 Foreign currency gain (loss) ,, ___,, G 129,130 (498,794) Otfaer.net _,, E (1,014,424) (1,816,730) (6,082.412) (9592,740) Loss before income taxes ~ -,, (31,3 36,105) (25,920,980) Income-taxes... ___,,. I 37,838 70,155 Net loss.. ,,..___$(31,423,943) $(25.991.135) Basic and diluted loss per share $(033) $(0.70) Weighted average number of common shares outstanding. ,,,,, A 95,249,972 37,141,490 Comprehensive loss Net loss.. $(31,423,943) $(25,991,135) Reclassification to net loss of loss on derivatives previously designated as cash flow hedges,.. ,, ___,, 143,858 Comprehensive loss $(31,423,943) $(25,847,277) See accompanying nates to consolidated financial statements |
PHOENIX COAL INC. CONSOLIDATED STATEMENTS OF SHAREHOLDERS EQUITY (Expressed In U.S. Dollars) For the years ended December 31,2008 and 2007 Accumulated Stock Other Common Shim Option* and Comprehend Accumulated Note Shares Dollars Warrants Low PeHcii Total December 31,2tH6 36^92,667 $21,040,818 $47,224 $ (143,858) $ (7,118,778) S 13,825,406 Imuuim of common «hana_. 1,591,440 1,989,287 1,989,287 Common share* converted to preferred shares O (982,667) (1,228,334) (1,228,334) ShatB-haserfcompeMuioa-opdora L 948,859 948,859 Wananfe issued in ramneerJan who prefenedsh_eoflerin| L 462,801 462,801 Share-based coraperuation * restricted shares ,, ___L 400,000 500,000 500,000 Exerra* of stock optfom l 300,000 125,000 125,000 Interest rats swan Q ___143,858 143,858 Net less -. (25,991,135) (25,991,135) December M.20II7 37,701,440 22,426,771 1,458,884 (33,109,913) (9,224,258) Smre capital contribution common shares issued in payment of loan lees H....,,.,, C.G 408,163 510,204 510,204 Issuance of common itwos to seals *W- C.0 8,668,000 10,276,682 10,276,682 Conversion of prefeoed snares, including scorned dividends, to eommonshares C.G 39,386^70 48,922,722 48,922,722 Value of additional share* issued in paymentordebt,,..»....- c,G 808,258 (808,258) Share-bucd compensation-options j_, ___260,000 260,000 Balances pre merger, pre snare issue, and prior to recording loss tor the year... 86,163,873 82^44,637 1,718,884 (33,918,171) 50,745,350 Marimba Capital Corp. equity balances pre-merger C 2^20,000 347,514 48,120 (88^55) 307,379 Marimba.Capital shares consolidated on the basis of 1 share for wary 235 shares outstanding. C (1,332,769) ___Reverse i_«eow adjustment.- C (88^55) 88,255 Reverse akeover costs incurred c (408,000) (408,000) Issuance of common shares C 62,857,160 97,784,678 97,784,678 Issuance of warrants QL (8,077,145) 8,077,145 ___ issuance of brokeroptioM C.L (1,106,286) 1,106,286 Shate-basodconrperoatkm-options-.-.. _. 5,675,289 5,675,289 Option and warrsnt* exercised L 37,288 12,838 12,838 Net!o___-. (31,423,943) (31,423,943) De«ember31,200a 150,045,552 $171,817,981 $16,625,724 $ $(65,750,114) $122,693,591 See accompanying notes to consolidated financial statements |
PHOENIX COALING CONSOLIDATED STATEMENTS OF CASH FLOWS (Expressed in U.S. Dollars) For the Yeira Ended December 31 Note 200J 2007 Cash now From Operating Activities Net loss..,- «31,423.943) $ (25,991,135) Adjustments to reconcile net lost to rat cash used in operating aclivities; DepraolatiCB and amortization _, ___A 10,729,602 5,607,126 Loss OB saleof property end equipment ,, ,, g ij0ia,7S0 1,810,131 Intewtrattswip G (224,696) 224,696 Unreiliad foreign currency (gain) lass ...,,, Q (129,130) 81,227 Share-buedcompens.tkM, L S.935,289 1,448,83? Asset Impairment write down ,,.,.,,.,,..,,,.._,,, A, 2,873,055 Reclamation liability ,, A (730,436) 1,244,438 to-kindinterest. ,..,,..-««,, ...,,«,,M,,,..,,,....,, ,,,,,,,,,, ,, ,, -j*qqqa Dividends accrued on preferred shares .,,,,_., Q 1,467,165 1,277,838 Changes in non-cash operating assets and liabilities: Account] receivable . 2£[ 8,442 CW45.742) Inventories*- ¦ A 1.192,838 (816^14) Prepaid expenses and other current assets..- . 59,433 (280,545) Trad* accounts payable and offer accrued liabilities.._.._.,,., ...___(3,901565) 3310,399 Net cash used ia operating activities (13,994,621) (9,406,060) Cash Row From Investing AcUvillr* R«OrKtedcash,cMheo^iys!cotj,sndccrtificatesc^ deposit,,. . K (8,833,264) (515,452) Payrrisritsfc^i]rve8tnieriti...,,H,MHM,.,Hm.UHU.,,IUMH.R..MM,,,».w,M %.. .,.., .,«, (1007071 -*~ Proceeds Bom sales of investments.. _^..,,,,.,,,,,._.,, 153 jqo 559,977 Payments fiir other assets, principally mine development and mining rights ,, ___(953,698) 0-239,842) Proceeds Sara sale of property ind equipment . ..--~ ,,.- .«. B 683,912 6^6,373 Psymentsfbr property and ecpaprnent H PWUO) (1,549,511) Net assets acquired in merger, prior to public offering , 307,379 Acquisition* ,, J) (27.946,494) (31.392,433) Net cash used I. (.voting acllvltlai (40^72,882) (28,230,898) Cash Clow From Fmancfais Activities rVmc%slpiyirientsanaeDt G (1.058-3*7) (21.618.644) Proceeds ftom debt, aetoffiMncingfbcs. ___Q 4,891,890 10.429.023 ItyrrBntsonequinmerrtftaDdag G (6,48e\279) (1,007,250) Reverse takeover costs Incurred. . ,,,, .,, C (408,000) Decrease in other long-term liabilities.... ,, _..,,.,...,, , (225,052) (580,482) Net proceeds Corn common and preferred share issuances and exercise of options and warrants C, L 97.797,516 42.488J89 Net cash provided by financing acilviflea 94.5n.738 29.711.236 Nit Inert^n* (Decrease)la Cash and Cask Eqalvaients.___....-, .. ..,,.,,,., 40,144,235 (7,925,722) Cash and Cash Equivalents, Betinniag; of Year .. _... . 381.374 8,307,096 Cash and Cash Equivalents, End of Year 5 40,523.609 $381,374 Supplements! DJscHMurc- Intsrastpsid : -. $2.179,723 S 6.814,827 Non-Cajti Investing and Financing Activities: Vendor financing fia equipment purchases ___Q $ 18,033.434 $ LO.293,381 Snares issued in connection with acquisition..___fj $ S 543.300 Vendor prwided financing of acquisition ,,.,,,,....,,,, ,, fj $ S 7,794,000 Receivable credited to acquisition ,, 0 $26X1.000 $ Shares issued in payment of flnBflcJBg fees ___Q $510,204 t 862,500 See accompanying notes to consolidated financial statements |
PHOENIX COAL INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31,2008 and 2007 NOTE A NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Nature of Operations: The Company is engaged in the production and sale of steam coal to utilities and industrial fuel consumers. The Companys mining activities are currently limited to one importable business segment, which is the Illinois Basin. On June 27,2008, Phoenix Coal Corporation (Phoenix) completed a reverse takeover (RTO) of Phoenix Coal Inc. (the Company), formerly Marimba Capital Corp. (MCC), which was previously listed on the TSX Venture Exchange (note C). MCC was incorporated under the Business Corporations Act (Alberta) on February 8, 2007 and was classified as a Capital Pool Company as defined in the TSX Venture Exchange Policy 2.4 and, accordingly, had no assets other than cash and no commercial operations. MCC changed its name to Phoenix Coal Inc. on June 25, 2008. Phoenix, a U.S. company headquartered in Madisonville, Kentucky with satellite offices in Champaign, Illinois and Louisville, Kentucky, was formed in Jury 2004 as a Delaware C corporation and was originally named Dynamic Separations, Inc. (DSI). Where the context requires, in respect to transactions prior to the RTO, die Company also refers to Phoenix. Principles of Consolidation: Pursuant to the RTO transaction, these consolidated financial statements for the years ended December 31, 2008 and 2007 reflect the assets, liabilities and results of operations of Phoenix prior to the RTO and the consolidated assets, liabilities and results of operations of the Company and Phoenix subsequent to the RTO. Tub consolidated financial statements are issued under the name of the legal parent (file Company), but are deemed to be a continuation of the legal subsidiary (Phoenix). The consolidated financial statements include Phoenix Coal Inc. and its subsidiaries, all of which are wholly-owned. Basis of Presentation: The consolidated financial statements of the Company have been prepared in accordance with Canadian generally accepted accounting principles (GAAF). All monetary references expressed in these notes are references to United States dollars, except occasional references to Canadian dollar amounts, where the dollar amount is preceded by Cdn (Cdn$). Use of Estimates: The preparation of the consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates. The assets and liabilities which require management to nuke significant estimates and assumptions in determining carrying values include, but are not limited to, coal inventories, property, plant and equipment, mining rights, mine development, mineral reserves, prepaid royalties, provision for income taxes, and asset retirement obligations. Reverse takeover accounting: The RTO was completed on June 27, 2008. Prior to the complerloo of the RTO, MCC affected a reverse split of its outstanding common shares on the basis of 1 new share for each Z35 shares outstanding. Pursuant to the RTO, the Company issued one common share for each outstanding common share of Phoenix. In addition, warrants and options to purchase Phoenix common shares outstanding Immediately prior to the RTO were replaced with warrants and options to purchase an equivalent number of common shares of ate Company, on economically equivalent terms and conditions. The capital changes of the Company related to the RTO are detailed in note C to these consolidated financial statements. Concurrent with the RTO, the Company raised 597,784,678, net of Issuance costs, In a prospectus offering of 62,837,160 subscription receipts priced at CdnS 1.75. In connection with the RTO, each subscription receipt was exchanged for one unit, each unit consisting of one common share and one half common share purchase warrant exercisable until June 25, 2010 at CdnS2.25 per share. The acquisition of the shares of Phoenix has been accounted for as an RTO transaction in accordance with guidance provided in Canadian Institute of Chartered Accountants* (OCA) Emerging Issues Committee (EIC) Abstract No. 10. As MCC did not qualify as a business for accounting purposes, the transaction has been accounted for as a capital transaction of Phoenix. Business Combinations: C1CA Handbook Section 1581 establishes standards for the recognition, measurement and disclosure of business combinations including criteria for the recognition of intangible assets of the acquired enterprise apart from goodwill. Initially, in all of the Companys previous acquisitions, including the acquisition of Pact Resources LLC |
PHOENIX COAL INC NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2008 and 2007 (Pacf), a development-stage enterprise, as described In note D, the amount of the purchase price is excess of the feir value of identifiable tangible assets was allocated in its entirety to goodwill. The Compaq has determined that in each of these acquisitions, the excess should have been allocated to mining rights. Consequently, on the June 30,2008 and subsequent balance sheets, the Company has reclassified $32,393,227, previously shown as goodwill at December 31,2007, to Mining Rights, Mine Development Costs and Mineral Reserves. Other than this rectification, the change in the purchase allocation in the Pact and other acquisitions has had no material impact on the reported financial position or results of operations of any prior period. Financial Instruments: CICA Section 3 855, Financial Instruments Recognition and Measurement, establishes standards tor recognizing and measuring financial assets, financial liabilities, and non-financial derivatives. Under CICA 3855 financial instruments are classified into one of the following five categories: held for hading assets or liabilities, held to maturity investments, loans and receivables, available for sale financial assets or other financial liabilities. Held for trading financial instruments are measured at feir value and all gains and losses are included in net income in the period in which they arise. Available for sale financial instruments are measured at fair value with revaluation gains and losses included hi accumulated other comprehensive income until the instruments are derecognized or impaired. Loans and receivables, investments held to maturity and other financial liabilities are measured at amortized cost using the effective interest method. The Companys financial instruments consist of cash and cash equivalents (Including restricted cash), short-term investments, trade accounts receivable, trade accounts payable and accrued liabilities, other long-term liabilities, and short-term and long-term debt, indudmg notes payable and preferred shares. Cash and cash equivalents are classified as held for trading, and are measured at fair value at the balance sheet date. Short-term investments are classified as held for trading and arc measured at fair value at the balance sheet date. Accounts receivable are designated as loans and receivables and accounted for at amortized cost Trade accounts payable and accrued liabilities, other long term liabilities and short-term and long-term debt, including preferred shares, are classified as other financial liabilities and accounted for at amortized cost Transaction costs for financial instruments, other than held for trading, are included in the value of the financial instrument. Income and expense related to financial instruments is included in the consolidated statement of operations as mterest income or Interest expense. Cash and Cash Equivalents: Cash and cash equivalents include demand deposits held with banks and highly liquid investments with original maturities of three months or less. For purposes of reporting cash flows, the Company considers all cash accounts mat are not subject to withdrawal restrictions or penalties to be cash and cash equivalents. Short-term investments: Short-term investments typically include certificates of deposit and investments issued by the United States government, such as Treasury bills and Treasury notes, with original maturities greater than three months. At December 31,2008, the short-term investment balance off 100,707 was entirely invested in certificates of deposit Trade Accounts Receivable; Trade accounts receivables are recorded at the invoiced amount and do not bear interest Customers are primarily investment grade companies and quasi-governmental agencies . As a result, the Company has not experienced any instances of non-payment and does not currently require an allowance for doabtful accounts. Management monitors customers closely and will record an allowance if trade account balances become potentialh/ uncollectible. Inventory: Ita Company accounts for coal inventories on a first-in-first-out basis and values these inventories at the lower of cost and net realizable value with cost determined using average cost per ton. Coal inventory values were $22.62 per ton at December 31, 2008 and ranged from $21.99 to $29.02 at December 31, 2007. At December 31, 2008, the total inventory value of $452,558 was valued at net realizable value. At December 31, 2007, the total inventory value of $1,072^97 comprised $748,454 that was valued at cost and $324,243 that was valued at net realizable value. The Company accounts for parts inventory using the original cost on a firsNn-first-out basis. Parts inventory is included in other current assets. There were no write downs or reversal of write downs of inventory recorded in 2008. Restricted Cash, Cask Equivalents, and Certificates of Deposit: Restricted cash balances are either used to collateralize letters of credit, or secure reclamation bonds with state agencies. These assets will not be released until the reclamation bonds are released by the state, and as such are not included in current assets. |
PHOENIX COAL INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31,2008 and 2007 Property, Plant and Equipment; Property, plant and equipment are stated at cost. The Company provides far depreciation on the straight-line basis with useftil lives that range from 5 to 10 years. Depreciation expense for the years ended December 31, 2008 and 2007 was $4,364,650 and $2,652,542, respectively. The cost of assets sold, retired, or otherwise disposed of and the related accumulated depreciation are eliminated from the accounts and any resulting gain or loss is included in operations. Expenditures for maintenance and repairs are charged to expense as incurred. Expenditures for major renewals and betterments that extend the useful lives of property, plant and equipment are capitalized Interest cost is capitalized for qualifying assets during the period in which the asset is being installed and prepared for its intended use. Capitalized interest cost is amortized on the same basis as the related asset No Interest costs were capitalized for the years ended December 31,2008 and 2007. Consistent with CICA Section 3063, Impairment of Long-Lived Assets, the Company evaluates long-lived assets for impairment when events or changes in circumstances indicate that their carrying amount may not be recoverable. This impairment testing is based on estimated future undlsoounted cash flows to be realized from the use of the tons-lived asset These future cash flows are developed using assumptions that reflect the long-term operating plans given managements best estimate of future economic conditions, such as revenues, production costs, and reserve estimates. A change in these factors could result in a modification of die Impairment calculation, Mm Development Costs: Mine development costs represent the costs incurred to prepare future mine sites fbr mining and are amortized on the units-of-productlon method. The net book value of mine development costs was $1,681,147 and $1,464,831 at December 31, 2008 and 2007, respectively. At December 31,2008 and 2007, die net book value of mine development costs included $1,446,478 and $882,896, respectively, attributable to properties where the Company was not currently mining and, therefore, the mine development costs were currently not being amortized. Development costa amortized totaled $665,243 and $455,408 for the years ended December 31,2008 and 2007, respectively. Mining Rights; Mining rights, which are lights to mine coal properties acquired through coal leases, are recorded at cost Mining rights are amortized on the units-of-productlon method. The net book value of mining rights totaled $50,712^374 and $32,893,227 at December 31,2008 and 2007, respectively. At December 31,2008 and 2007, the net book value of mining rights included $45,627,773 and $24,854,649, respectively, attributable to properties where the Company was not currently mining and, therefore, the mining rights were currently not being amortized. Mining rights amortized totaled $3,382,180 and nil fbr the years ended December 31,2008 and 2007, respectively. In June 2007, the Company closed its Crittenden County Coal mining operation due to uneconomical mining conditions. As a result of the closing, we Company recorded an asset impairment writs down related to its mining rights of $2^173,055. Mineral Reserves; Mineral reserves, which are coal properties fbr which the Company owns the coal in place, are recorded at cost At December 31, 2008 and 2007, the net book value of mineral reserves totaled $189,434. This entire amount is attributable to properties where the Company was not currently engaged in mining operations and, therefore, the assets were not currently being depleted. Prepaid Royalties: Rights to leased coal lands are often acquired through royalty payments. Where royalty payments represent prepayments recoupable against production, they are recorded a s a prepaid asset As mining occurs on these leases, the prepayment Is charged to cost of sales. Prepaid royalties were $492,418 and $80,683 at December 31,2008 and 2007, respectively, and are included in other assets. Asset Retirement Obligations: CICA Handbook Section 3110, Asset Retirement Obligations, addresses financial accounting and reporting fbr obligations associated with the retirement of tangible long-lived assets and the associated asset retirement costs. The Companys asset retirement obligation (ARO) liabilities primarily consist of spending estimates related to reclaiming surface land and support facilities in accordance with federal and state reclamation laws as defined by each mining permit |
PHOENIX COAL JNC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31,2008 and 2007 Revenue Recognition: The Company recognizes revenue when all of the following criteria are met: (1) persuasive evidence of an arrangement exists, (2) delivery has occurred or services have been rendered, (3) the sellers price to the buyer is fixed or determlnable, and (4) collectability is reasonably assured. In the case of coal that Is mined and sold, a specific sales contract is negotiated with each customer, which includes a fixed-price per ton, a delivery schedule, and terms of payment Royally Expense: The majority of the coal that the Company mines is owned by other entities. The Company acquires the right to mine and sell the coal through various leases. These leases require the Company to pay a royalty to the owners of the land and the minerals being mined. Royalty expense for the years ended December 31,2008 and 2007 was $3,778,642 and $3,391,015, respectively, and is included in selling expenses on the consolidated statement of operations. Income Taxes: Future Income taxes are provided for temporary differences arising from differences between the financial statement and tax basis of assets and liabilities existing at each balance sheet date using substantively enacted tax rates expected to be in effect when the related taxes are expected fo be paid or recovered Loss per Stare: The Company uses the treasury stock method to compute the dllutiveeffcrtofoptiona and warrants. Under mis method the dilutive effect on loss per share is recognized on the use of the proceeds tfiat could be obtained upon exercise of options and warrants. It assumes that the proceeds would be used to purchase common shares at the average market price during the year. The Company also uses the if converted method to compute the dilutive effect of any convertible debt For loss per share, the dilutive effect has not been presented, as it would prove to be anti-dilutive. Basic and diluted loss per common share is calculated using the weighted-average number of common shares outstanding during the year. As a result of the RTO transaction, die basic and diluted loss per share has been presented in accordance with the guidance provided in EIC Abstract No. 10. Stock-based compensation: The Company uses the fair value method for options, warrants and restricted stock granted. The fm value of stock options and warrants is determined by the Black-Scholcs option pricing model with assumptions for risk-free interest rates, dividend yields, volatility factors of the expected market price of the Companys common shares and an expected life of the options and warrants. The fair value of the restricted stock is determined to be the equivalent of the Companys common shares trading price on the date of the grant; The fair value of the instruments granted is amortized over this vesting period. Foreign currency translation: The Company translates monetary assets and liabilities at the rate of exchange in effect at the balance sheet date and non monetary assets and liabilities at historical exchange rates. Revenues and expenses are translated at rates prevailing at the dates of the related transactions. New Accounting Policies: Capital Disclosures: Effective January 1,2008, the Company adopted CiCA Handbook Section 1535, Capital Disclosures. Handbook Section 1535 specifies the disclosure of (1) an entitys objectives, policies and processes for managing capital; (li) quantitative data about what the entity regards as capital; (Hi) whether the entity has complied with any capital requirements; and (iv) if it has not complied, the consequences of such noncompliance. The Company has included disclosures recommended by the new Handbook section in note B to these consolidated financial statements. Inventories: Effective January 1, 2008, the Company adopted new accounting recommendations set out in the CICA, Handbook Section 3031, Inventories, which supersedes the previously issued standard on inventory. The new standard introduces significant changes to the measurement and disclosure of Inventory. The measurement changes include: the elimination of LIFO, the requirement to measure inventories at the lower of cost and net realizable value method for inventories that are not ordinarily interchangeable and goods or services produced for specific purposes, the requirement for an entity to use a consistent cost formula for inventory of a similar nature and use, and the reversal of previous writedowns to net realizable value when there is a subsequent increase in the value of inventories. Disclosures of inventories have also been enhanced. Inventory policies, carrying amounts, amounts recognized as an expense, write-downs and the reversals of write-downs are required to be disclosed. This standard has had no material impact on the Companys consolidated financial statements. Financial Instruments Disclosures and Presentation: Effective January 1,2008 the Company also adopted the following new CICA Handbook Sections: Section 3862, Financial Instruments Disclosures, and Section 3863, Financial Instruments |
PHOENIX COAL INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31,2008 and 2007 Presentation. Sections 3862 and 3863 consist of a comprehensive series of disclosure requirements and presentation rules applicable to financial instruments. Section 3862 revises and enhances the disclosure requirements set out in Section 3861, Financial Instruments Disclosure and Presentation, and Section 3863 carries forward unchanged the presentation requirements of Section 3861. Section 3862, Financial Instruments Disclosures, requires die Company to provide disclosures in its financial statements that enable users to evaluate the significance of financial instruments for tbe Companys financial position and performance, the nature and extent of the risks arising from financial instruments to which the Company ia exposed during the year and at the balance sheet date, and how tbe Company manages those risks. The Company has included disclosures recommended by the new Handbook section in note H to these consolidated financial statements. Amendments to Section 1400 General Standards qf Financial Statement Presentation: The CICA amended Handbook Section 1400, Going Concern, to include additional requirements to assess and disclose an entitys ability to continue as a going concern. The Company has determined that these amendments had no material impact on the Companys consolidated financial statements. Future Accounting Changes; Goodwill and Intangible Assets: The CICA has issued a new standard which may affect the financial disclosures and results of operations of the Company for interim and annual periods beginning January 1, 2009. Section 3064, Goodwill and intangible assets, establishes revised standards for recognition, measurement, presentation and disclosure of goodwill and intangible assets, Concurrent with the introduction of this standard, the CICA withdrew EIC-27, Revenues and Expenses during the pre-operating period. International Financial Reporting Standards (IFRS): In 2006, the Canadian Accounting Standards Board (AcSB) published a new strategic plan that will significantly affect financial reporting requirements for Canadian companies. In February 2008, the AcSB announced that Canadian GAAP for publicly accountable enterprises will be converged who IFRS effective in calendar year 2011. The Company will adopt IFRS for the fiscal year beginning January I 2011, with restatement for comparative purposes of amounts reported by the Company for the fiscal year beginning January 1,2010. The Company is currently in the planning phase of the conversion, which includes identifying potential differences between GAAP and existing IFRS at December 31,2008, as well as proposed IFRS which may be in effect in 2011. The Company is utilizing both internal and external resources to identify and ultimately quantify these differences and tbe impact that they will have on accounting policies, infbrmation technology and data systems, internal control over financial reporting, disclosure controls and procedures, financial reporting, and business activities. Employees responsible for financial reporting will attend IFRS training and begin IFRS accounting policy development in 2009. Reclassiflcatlons: Certain of die 2007 figures have been reclassified to conform to the 2008 financial statement presentation. NOTE B -CAPITAL MANAGEMENT The Company manages its capital structure and makes adjustments to It, based on the funds available to the Company, in order to support the acquisition, exploration and development of its mineral properties. The Board of Directors docs not establish quantitative return on capital criteria for management, but rather relies on the expertise of the Companys management to sustain future development of the business. Tbe Company defines capital to include its shareholders equity, long and short- term debt, vendor financing, and its preferred shares. Capital, as defined, totaled $143,867381 and $59,419,009 at December 31,2008 and 2007, respectively. The mineral properties in which the Company has an interest are in both the active mining and development stages. The Company manages its capital structure in a manner that provides sufficient funding for operational activities, capital expenditures, and mine development. Funds are secured through a combination of equity capital and external debt In order to maintain or adjust the capital structure, the Company may attempt to raise additional financing through the issuance of sew equity securities, the exercise of outstanding common share warrants and stock options, or the issuance of debt instruments Such as term loans, equipment financing, and sale-leaseback arrangements. |
PHOENIX COAL INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31,2008 and 2007 During the years ended December 31, 2008 and 2007, the Company generated cash flows from equity capital and external debt as follows: 2008 2007 Proceeds from debt, net of financing fees . $4,891,890 $10,429,023 Net proceeds from common share, warrants and preferred share offerings and exercise of options and warrants ___97,797,516 42,488,589 Vendor financing of equipment purchases and acquisitions .,, 18.025.434 18.087.381 Total proceeds from equity capital and external debt S 120.714.840 t 71.004.90,3 Management reviews its capital management approach on an ongoing basis and believes that this approach, given the relative size of the Company, is reasonable. There were no changes in the Companys approach to capital management during the year ended December 31, 2O08. Neither the Company nor its subsidiaries axe subject to externally imposed capital requirements. NOTE C RTO AND RELATED CAHTAL ACTIVITY On May 22,2008, MCC and Phoenix entered into a definitive merger agreement with respect to the RTO discussed in note A. On May 22,2008, MCC also filed a preliminary prospectus for an offering (the Offering) of Subscription Receipt* (me Subscription Receipts), each Subscription Receipt entitled the holder to receive one unit (a Unit), each Unit consisted of one common share of MCC and one-half of one warrant of MCC, subject to the satisfaction of certain conditions. MCC applied to have the common shares and warrants listed oa the Toronto Stock Exchange (the TSX). The Subscription Receipts were offered to the public in all of the provinces of Canada, except for Quebec, and in the United States in an offering exempt from the registration and prospectus requirements of the U.S. Securities Act Subject to applicable law, the agents acting in connection with the Offering also offered the Subscription Receipts outside of Canada and die United States. The Offering consisted of 62,857,160 Subscription Receipts at a price of Cdn$1.75 per Subscription Receipt to raise gross proceeds of CdnSl 10,000,030. Pursuant to an agreement among MCC, Phoenix and the Offering agents, the agents received a cash commission equal to 6% of the gross proceeds of die Offering phis compensation options equal to 4% of the Subscription Receipts sold pursuant to the Offering. A summary of the gross proceeds received and Offering costs incurred is as fellows: Gross proceeds (CdnSl 10,000,030 converted to VS. dollars at a conversion rate of 0.99007 U.S. to Cdn) S 108,908,500 Agents* fees. .. , . ,,,, ^,, ,, - (6,534,510) Other out-of-pocket costs ,,,, ,,,. ,, (4,589,312) Net proceeds ,, ~~... - $97.784,678 In addition to the Offering costs, the Company incurred $408,000 in costs related to the RTO which have been treated as a capital transaction and charged to accumulated deficit |
PHOENIX COAL INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31,2008 and 2007 Common and preferred share activity in 2008, up to and including the KTO closing date, is detailed as follows: Number Phoenix Common Share* Issued -105,1)00,000 authorized, $.001 stated value per share of Shares Amount Balancet Decembers!. 2007 ,,,,,,,.. _,.. ,, 37,701,440 S 22,426,771 Conversion offinaneecomply debt to common sharM.iricludmg ETC-96 idjustniont-note G.___8,668,000 11,084,940 Issued for fees on payment of debt-noteG 401,163 510^204 Conversion oT preferred shares to common shun- noteO ___, 37,190,267 46,177,718 Issued to settle dividends on preferred sham- sole Q . ,.,,- - ... 2,196.003 2.745,004 Balance June 27,2008, pre RTO - 86,163.873 S 82,944,637 Number Phoenix Preferred Sham Issued 40,000,000 authorized, $.001 stated value per shire ofSharcs Aroonat Balance, December31,2007,oriudiagaccr«edd1videi>d*OfSl,2?7,83 0 ... . 37,190^67 $44,357,330 Accredan of preferred share ottering costs~~~.~ . _«...,..»...»4.«. -«. ,,.,,.,,.,..^-,,,,_ 1,820;1&8 Conversion of preferred shares to common stares note G.. «,,,.,,. ,, ,,. .___,.-. (37,190.267) (46,177,718) Balance, June 27,2008.,,..,.,., ,,.,, ___,,-..,,,._,., ¦¦,. $ Number MCC and Company Common Shares Issued- unlimited authorized ofSharaa Amount Balance, December 31,2007 ,, ___, , «. 2,320,000 $347,314 Consolidated on the basil of 1 share for every 3.35 sharei ouartandinf-noteA - ,, . (1333.7691 Balance after consolidation... . ,,,, . 987,231 347,514 Issued in public oSferina. 62,857,160 97,784,678 Reverse takeover adjiatraeat ,,.. (8»\255) Value of broker options aivJsharchoIder warrants issued wMi pubBeoffering (9,183,431) Shan capital arising from RTQ transaction on June 27,2008 -note A 86.163,873 82.944ff37 Balance June 27.2008, post KTO ,, , ,, ___.___150,008^64 $171.805.143. NOTE DACQUISITIONS C&R Coal Inc. In July 2008, the Companys subsidiary, R&L Wton toe. (R&L Warn), purchased all of the outstanding common shares of C&R Coal Inc. (C&R) for cash consideration of $2,051,000, In addition, under the terms of the agreement, R&L Wlnn will pay the former owners a royalty of $0.60 per ton for each ton of coal sold from the C&R mines. The current mining area, Beech Creek and Beech Creek South, contained approximately 450,000 reserve tons (697,000 reserve tons as at December 31,2007 pursuant to the Companys National Instrument 43-101 revised technical report less coal mined in the first seven months of 2008) as at July 31,2008. R&L Wion also acquired other leases in the transaction from C&R and R&O Leasing, LLC, a company that is affiliated with C&R through common ownership. Based on exploration completed to date by the Company, management estimates the leases contain approximately 1,500,000 tons of coal. The potential quantity is conceptual in nature as there has been insufficient exploration to define a mineral resource and it is uncertain that further exploration will result in the delineation of a mineral resource. The cost of the C&R acquisition was allocated to the following identifiable net assets: Current assets and restricted certificates of deposit ,,,.........,«,,.. .. $1,281,000 Mining equipment ,, ,,.-« ~ 859,000 Mining rights and mine development costs ,, ,, 2^87,000 Assumed liabilities- ,, (2,476,000) $2,051,000 Prior to July 2008, the Company operated and managed C&Rs mines under a management and adnurustrative services agreement. Since the Company did not own nor control C&R, it did not consolidate its operating results prior to July 2008, and recorded funds invested and services provided in other assets and accounts receivable on its balance sheet, which totaled 1612,751 at December 31,2007. |
PHOENIX COAL INC NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31,2008 and 2007 Renfro Equipment, Inc. In July 2008, the Company purchased all of the outstanding common shares of Renfro Equipment, Inc. (Renfro) for total cash consideration of 51,129,000. Additionally, the Company incurred 118,000 of dosing costs. The purchase included all assets and liabilities of Renfro, except certain equipment and associated debt specifically excluded from the purchase. Based on exploration completed to date by the Company, management estimates Renfro controls approximately 1,000,000 tons of coal reserves and 465,000 resource tons via lease. The potential quantity is conceptual in nature as there has been insufficient exploration to define a mineral resource and it Is uncertain that further exploration will result in the delineation of a mineral resource. Additionally, if by the second anniversary of the closing date, me Company acquires at least 1^00,000 reserve tons as defined by National Instrument 43-101 due to the direct efforts of the sellers (the Additional Reserves), the Company will pay the sellers Sl,000,00O for the first \5 million tons of reserves, plus S0.S0 per ton for each reserve ton in excess of 1.5 million. The share purchase agreement defines a specific territory from which the Additional Reserves can be acquired. The acquisition of the Additional Reserves is on terms and conditions acceptable to the Company in its sole, reasonable discretion. The cost of the Renfro acquisition was allocated to the following identifiable net assets: Current assets and restricted certificates of deposit ,,..,,, ,,_._ . S 334,000 Mining equipment ,, ~~ . -. 429,000 Mining rights and mine development costs.. ,,.,.,, ,,...,,..,,.,,. ,,,,,,,...,, 1,770,000 Assumed liabilities. ,,.. (1,386,000) $1,147,000 The Company is in the process of finalizing its valuation of the assets acquired and liabilities assumed for both the C&R and Renfro acquisitions. The above allocations are preliminary estimates of fab- value and may differ from the final allocation and the differences may be material. The Company will finalize the allocations within one year of the acquisition dates. Pact Resources LLC In October 2007, the Company acquired the membership interests in Pact Resources LLC (PACT) upon exercising its option in September 2007 pursuant to the option agreements dated September 7,2006 {the Option Agreements). Through the acquisition of PACT, the Company controls the leases for the proposed Pratt Mine within the area of interest as defined in the Option Agreements. The proposed Pratt Mine contains both underground and surface coal totaling 33,333,000 tons of measured and indicated resources, 670,000 tons of inferred resources and 28,933,000 toss of proven and probable reserves. The Company has been carrying out development work on the proposed Pratt Mine since the fourth quarter of 2006, and in August 2008 received a state permit which will allow the Company to begin construction on the Pratt Mine. In addition to the leases for the proposed Pratt Mine, the sellers of PACT delivered to the Company the lease for the Panama South property, which is described further below. As a result, the in-place tons associated with the Panama South property were included in the calculation of the Scheduled Payment (as described below). The Panama South property contains both underground and surface coal totaling 76,287,000 tons of measured and Indicated resources. Pursuant to the Option Agreements, in addition to the scheduled payment for in-place tons of coal delivered by the sellers (the Scheduled Payment), which payment terms would be subsequently modified, the Company agreed to pay £300,000 (the Option Fee) at the effective date of the Option Agreements, an overriding royalty no greater than 3% o f the gross sales price per ton sold from the proposed Pratt Mine (the Overriding Royalty) awl expenses related to the development of the proposed Pratt Mine during the option period (the Pratt Expenses). Prior to the closing of the acquisition, the Company and the sellers of PACT modified the original Option Agreements and entered into modification of option agreements (the Modification of Option Agreements). The Modification of Option Agreements stipulated that the Scheduled Payment was SI 5,000,000 payable in three installments, 510,000,000 of which was paid in 2007, plus a true-up payment of $0.10 per in-place ton on September 7, 2008 for any additional tons of coal greater than 150,000,000 in-place tons that the sellers deliver. As at December 31,2007, the Company estimated that the sellers had already delivered 177,940,000 in-place tons of coal for a total Scheduled Payment of $17,794,000. As such, the Company recorded an additional $7,794,000 of vendor |
PHOENIX COAL INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31,2008 and 2007 financing on its consolidated balance sheet due to the former owners of PACT as at December 31,2007. Of this amount, $5,000,000 was originally payable in April 2008, with the balance due in September 2008. On March 31, 2008, the Company entered into a buy-out agreement with the former owners of PACT, which was subsequently amended in June 2008 (collectively the Buy-out Agreements). Under the terms of the Buy-out Agreements, if die Company either completed a public offering of its shares, sold On a private sale) more than 50% of its issued and outstanding shares or more than 50% of its assets, or completed an RTO (the Monetization Event), the Company would pay the former owners of PACT $25 million (the Buy-out Payment). Pursuant to the Buy-out Agreements, Phoenixs obligations to make a $5 million payment in April 2008 and the balance in September 2008 were suspended until the occurrence of a Monetization Event Upon receipt of the Buy-out Payment, all obligations of Phoenix to make any additional payments, including the accrued amount on the consolidated balance sheet as at December 31, 2007 and future overriding royally payments, would cease and terminate. In the event the Monetization Event was an RTO, and the offering was not closed on or before July 1,2008, then all obligations of the Company to mate additional payments to the former owners of PACT for the PACT properties would be reinstated at that time. On June 27,2008, the Company completed the RTO and paid $25,000,000 to the former owners of Pact on June 30, 2008. At December 31,2007, Phoenixs acquisition costs In PACT totaled $12,909,000. With the $25,000,000 Buy-out Payment paid on June 30, less the vendor financing of $7,794,000 previously recorded at December 31,2007, the acquisition costs increased by $17,206,000 during the year ended December 31,2008, with a corresponding increase in mining rights. The Companys total acquisition cost of PACT is comprised of the Option Fee, Pratt Expenses, the Scheduled Payments, and the Buy-out Payment which total $36,115,000 (the Purchase Priced at December 31,2008 and $18,909,000 at December 31,2007 as follows: 2001 2BQ7 Option Fee ,, ,, $300,000 $300,000 Pratt Expenses ,,. 815,000 815,000 Scheduled Payments and Buy-out Payment . 33,000,000 17,794,000 S 36,113,000 $18,909,000 The Purchase Price was allocated to the following identifiable net assets: 20M 2087 Cash. ___$3,000 $3,000 Advance royalties ___,, ,, ___.. 42,000 42,000 Land purchase option ___75,000 75,000 Mining rights and mine development costs . ... 35,995.000 18.789,000 S 36.115.000 S 18,909,000 At the acquisition date, the owners of PACT owned less than 1% of the total outstanding shares of Phoenix and also held 300,000 options to purchase common shares of Phoenix. The PACT purchase price was negotiated by members of senior management that had no financial ownership in PACT and the acquisition was considered to be an arms-length transaction. During 2008, the Company finalized the purchase allocation and related valuation of the assets acquired and liabilities assumed for the PACT acquisition. Initially, the purchase price in excess of tangible and identifiable assets was allocated to goodwill. However, as PACT is a development stage enterprise which has not yet commenced commercial production, the Company has concluded that the allocation should be to acquired mining rights as explained more fully under Business Comfainations ,, in note A. Panama South In December 2007, the Company entered into a lease with Peon Virginia Operating Co., LLC for the right to mine its Panama South property, located in Webster County, Kentucky, which contains bot h underground and surface coal totaling 76,287,000 tons of measured and indicated resources. In connection therewith, the Company paid a non-recoupable fee of |
PHOENIX COAL INC NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31,2MB and 2007 S500.000. The lease outlines three terms: (I) the development term (the Development Terra), from the effective date of the lease until December 31,2011; (2) the primary term (the Primary Term), from the end of the Development Term until the earlier of. (i) December 31, 2021, (ii)the time at which the Company has mined and removed all leased coal, or (HI) termination of the lease; and (3) the remainder term, from the end of the Primary Term until me Company has completed reclamation, environmental and other obligations under the lease. The Primary Term can be renewed twice for a period of five years each. The Company is required to pay a tonnage royalty tor each ton of leased coal mined and sold, and a monthly minimum rental fee. Each months tonnage royalty will be credited against the monthly rmrmnum rental fee such that no minimum rental payment shall be due in any month where tonnage royalties equal or exceed the minimum rental. The Company is also required to pay a wheelage fee for any coal mined from adverse lands and transported through me leased premises. The Company must produce and ship no less than 500,000 tons of leased coal from the leased premises during the calendar year ending December 31, 2014 and during each calendar year thereafter. Failure to do so will result in the payment of additional fees under the lease. Charolah Corporation In January 2007, the Company acquired assets and shares of the Charolais Corporation and related entities for a total consideration of S21,924,000 principally allocated as follows: Real property ,, ___. .,,,,.,,.,,,.,,,,,.,, $557,000 Plant and equipment ___,, ,,.,,..,,,.».-. ... 13,483,000 Mining rights and mineral reserves ,, > ___8,705,000 Asset retirement obligations ,, ,, (821,000) $21,924,000 The purchase price paid to the seller was $21,735,000, including 434,640 common shares of the Company valued at $543,000. In addition, the Company incurred $189,000 of transaction costs related to the purchase. The purchase bom expanded the Companys reserve base in the Western Kentucky markets, and increased sales volume wiiri a well established utility, NOTE EPROPERTY, PLANT AND EQUIPMENT.NET Property, plant and equipment consists of the following at December 31: 2MB Accumulated Cart Depreclttkm N>t Book Value Land .- S 1,474,574 $. S 1,474474 Building and improvements _ 25,424 7,698 17,726 Preparation plant ~ ~- 3,084,768 347,416 2,737,352 Mining equipment ,, 45,886,694 5,758,494 40,128,200 Loading and marine transport equipment ,, l ,775,000 340,208 1,434,792 Office equipment- ,, ,, 370,450 158,172 212^278 Vehicles 65,965 32^83 32^82 $52,682,875 S 6,644,971 $46,037,904 |
PHOENIX COAL INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31,2008 and 2007 2D07 ___ Attnmulattd Cm* Depreciation Net Bank Value Land ,, ___$599,654 $ $599,654 Building and improvements ,, 25,424 5,156 20,268 Preparation plant ,, 1,476,805 260,003 1,216,302 Milling equipment ,, 27,684,863 2,393,571 25,291,292 Loading and marine transport equipment ,, .. 1,775,000 162,708 1,612,292 Office equipment .,.,, ..,,.-..-«___~- 324,684 82^85 242^099 Vehicles ,, ,, 65,965 19.790 46475 $31.952395 $2,923,813 129,028,582 In 2008, the Company sold several pieces of non-core equipment, generating gross proceeds of $683,912. The Company recorded a loss of 51,012,780 related to these sales. In November 2007, the Company sold certain assets and reserves to Covol Fuels No. 2, LLC (Covol) for $4,230,000 in cash. The- assets comprised a permit, lease, mobile equipment, a preparation plant and slurry reserves. As part of the agreement, the Company entered into a coal purchase and sale agreement to purchase the processed coal fines from Covol and a coal processing agreement to enable the Company to temporarily wash its coarse coal product at the preparation plant In addition to the Covol sale, the Company also sold non-core real estate for gross proceeds of $1,926,951, and other smaller, non-core assets such as mobile equipment during 2007. The Company incurred net losses of $1,810,138 related to the disposal of these assets in 2007. NOTE FASSET RETIREMENT OBLIGATIONS The Company estimates its ARO liabilities for fwal reclamation and mine closure based upon detailed engineering calculations of the amount and timing of the future cash spending for a third party to perform the required work. Spending estimates are escalated for Inflation and men discounted at me ovdaVaijusted risk-free rate, which ranged from 6.12% to 7.64% at December 31,2008 and 6,53% at December 31,2007. Total estimated undiscounted future cash spending related to the ARO liabilities totaled $5,142,000 at December 31,2008, with spending estimated to occur from 2009 to 2016. Total estimated undiscounted future cash, spending related to the ARO liabilities totaled $4,437,000 at December 31, 2007. The Company records an ARO asset associated with the discounted liability for final reclamation and mine closure. The obligation and corresponding asset are recognized in the period in which me liability is incurred. The ARO asset is amortized on the unite-of-production method over its expected life and the ARO liability is accreted to the projected spending date. As changes in estimates occur (such as mine plan revisions, changes in estimated costs or changes in timing of the performance of reclamation activities), the revisions to the obligation and asset am recognized at the appropriate credit-adjusted risk-free rate. The Company also recognizes an obligation fbr contemporaneous reclamation liabilities incurred as a result of surface mining. Contemporaneous reclamation consists primarih/ of grading, topsoil replacement, and revegetation of backfilled pit areas, A progression of the reclamation liability recorded on the consolidated balance sheet is as follows: JOCS 2097 Balance at beginning of year $3,757,353 $1,536,948 Liabilities acquired ,, 1,131,000 821,000 Liabilities incurred ,, ,, ,,. 166,083 1,339,052 Accretion. ,, 189,132 60,353 Liabilities settled ~ ___(919,568) Total asset retirement obligations .,, 4,324,000 3,757,353 Less current portion ,,...- ,, ___1,958,000 1,667,000 $2,366,000 $2,090,353 |
PHOENIX COAL INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31,2008 and 2007 NOTE G DEBT Revolving Line-of-CredU Prior to July 2008, the Company had a S3.I million secured llne-of-credit agreement with a bank for working capital purposes. The line-of-credit was collateral ized by general business assets of the Company, including but not limited to equipment, accounts receivable and inventories. On July 7,2008, there was no balance owing on the line of credit facility when the Company terminated the line of credit The collateral has since been released. The line bore interest at the LIBOR rate phis 4% (8.60% at December 31,2007). There was no outstanding balance on the line-of-credit at December 31,2007. Preferred Shares In 2007, the Company conducted a preferred share offering. Preferred shares were issued in August 2007 and the proceeds used tor working capital and the reduction of outstanding debt The holders of preferred shares had the right to that number of votes equal to the number of shares burnable upon conversion of the preferred shares. Subject to the restrictions of any credit facility that may have been in effect, the preferred shares paid a 6.5% per annum cumulative dividend upon redemption or in common shares upon conversion. Additionally, holders of Series C common shares could exchange one common share for one preferred share for every preferred share purchased. Proceeds received and preferred shares issued m the third and fourth quarters of 2007 related to the preferred share offering, less related expenses, were as follows: Starts Per Stare Total Preferred shares , 36,207,600 Si 25 $45,259,500 Common shares converted to preferred shares ~. 982,667 1,25 1,228,334 Issue costs ,, ,.,,,...,,,,...,,,. (3,592,198) Totals as at December 31,2007 37,190,267 S 42,895,636 Preferred shares conld have been converted by the holder at any time to common shares based on a conversion formula incorporating the issue price of the preferred shares and subsequent values of common shares. The preferred shares would be converted automatically into common shares upon the closing of an underwritten public offering of common shares of the Company or if the holders of a majority of the preferred shares consented to the conversion into common shares. Additionally, subject to various restrictions and the automatic and voluntary conversion provisions noted, commencing one year after issuance of the preferred shares, the holder could request redemption of the preferred shares at ha issue price (SI .25 per share) plus any unpaid dividends. Due to the redemption features, OAAP required the preferred shares to be recorded as debt Costs related to the preferred offering were netted against the liability. The liability was being accreted to its face value using the effective interest rate method and the accretion recorded as interest expense. Dividends due on the preferred shares were also included in interest expense, which totaled $1,467,165 and $1,277,838 for the years ended December 31, 2008 and 2007, respectively. The net carrying value of the preferred shares, including accrued dividends of $1,277,838, was $45,635,369 at December 31,2007. On June 27, 2008, in conjunction with the RTO, the preferred shares and accrued preferred dividends were converted to common shares at the conversion price of $1.25 per share. The carrying value of the preferred shares prior to the conversion was reclassified to common equity. A summary of the conversion is as follows: CommoQ Shares Preferred shares issued 37,19(067 $46,487,833 Preferred shares offering costs net of accretion. ___(310,115) Preferred share dividends accrual - 2.196.003 2.745,004 Amounts reclassified to common shares 39,386 270 $48 922,722 |
PHOENIX COAL INC NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31,2008 and 2007 Bridge Loan In November 2007, the Company entered into a loan agreement with a finance company, acting as administrative agent for a syndicate of lenders, for CdnS6,000,000. The note was coltateralfzed by, among other thugs, the assets of PACT, was scheduled to mature on October 31, 2008, and bore interest at 12%. Interest on the note was paid monthly. The principal amount of the loan could be converted, in whole or in part, by the lenders at the time of an initial public offering of securities of the Company, at a conversion price equal to 90% of the ottering price. The value of the note was adjusted to U.S. dollars based on current exchange rates, and any adjustments were charged or credited to the consolidated statement of operations, As consideration for the loan, the Company paid to the lenders a non-refundable $£00,000 bonus in the form of 480,000 common shares at a deemed price of $1.25 per share. The value of the outstanding loan was $5,526,785 net of unamorflzed loan fees as at December 31,2007. In May 2008, the Company modified its loan agreement with the finance company, acting as administrative agent for a syndicate of lenders, that initially loaned the Company Cdn$6,000,000 in November 2007. The Company borrowed an additional CdnS5,000,000 million (the Additional Loan). The net proceeds of the Additional Loan after fees and converting to VS. dollars was 34,877,000. The terms and conditions of the loan agreement were substantially the same except for the conversion price employed should the lenders exercise their right to convert the principal amount of the loan to common equity. The principal amount of the loan (including the initial loan, which was amended at the time of the Additional Loan) was convertible, in whole or in part, by the lenders at the rime of an initial public offering of securities of Phoenix or reverse takeover involving Phoenix (a Going Public Transaction) at a conversion price equal to 80% of the Going Public Transaction offering price. As consideration for the Additional Loan, the Company paid to the lenders a non-iefimdabie $510,204 bonus in the form of 408,163 common shares at adeemed issue price of 51.25 per share. On June 13, 2008, the Company and the finance company, on behalf of each of the lenders, entered into an agreement clarifying the terms of the loan agreement modified in May 2008 pursuant to which, provided that no event of default had occurred, (A) immediately prior to completion of the direct share exchange, expected to occur on or before June 30,2008, the principal amount of the loans would be fully converted into common shares of the Company at a conversion price of $1.25 per common share, such that upon conversion, the finance company {or its designees) would receive a number of common shares equal to CdnSl 1,000,000 divided by $125 (based on the Canadian dollar to United States dollar exchange rate at the time of the conversion), and (B) no adjustment to the number of bonus common shares issued in connection with the loans would be required. The agreement was conditional upon, among other things, the offering closing on or prior to July 2,2008. As a result of the modifications of the conversion terms of the November 2007 debt, pursuant to EI096, Accounting for the Early Extinguishment of Convertible Securities through Early Redemption or Repurchase and Induced Early Conversion, the Company distributed an estimated 499,000 additional common shares to the lenders related to the November 2007 debt of Cdn$6,000,000, since the conversion price decreased from 90% of the offering price to $1.25. As a result of the additional common shares distributed, the Company recorded a charge to accumulated deficit and an offsetting increase to share capital of $808,258. On June 23,2008, the finance com pany, on behalf of each of the lenders, elected to convert the entire principal amount of the loan into common shares of the Company. Based on a loan value of $10,835,000, and a conversion price of $1.25 per share, the Company issued 8,668,000 common shares to ihe lenders. The ban value of $10,835,000, less unamortized loan costs of $558,318, was credited to sharecaphal. The assets collateralizing the loan have been released, |
PHOEMXCOAHNC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31,2008 and 2007 Long Term Debt Summary Long-term debt consists of tha following at December 31: zooa «07 Bank notes payable, interest at 7.25% to 8.90%. Payments are made in monthly installments. The loans are collateralized by various pieces of equipment and mature April 2010 $105,109 S Equipment notes payable, interest at 5.25% to 8.75%. Payments are made in monthly installments. The loans are collateralized by related assets with a net book value of $26,773,902 as at December 31, 2008 and have maturity dates from May 2009 to December2012. 21,068,681 9,687,113 Total long-term debt . 21,173,790 9,687,113 Less current portion..-, , , ... .. ,,.. 6,532,045 2,338,198 $14,641,745 $7,348,915 Expected maturities of notes payable based on years ending December 31 are as follows: 2009 $6,532,045 2010 . ,, ,,. 6,543338 2011 5.709,365 2012 ,, 2,389,042 $21,173,790 Interest Rate Swap and Other Debt In 2006, the Company entered into an interest rate swap transaction whereby the Interest payments on an original notional dollar amount of $7,000,000 converted to a fixed rate of 8.10% compared to a variable rate of LIBOR re-measured on a quarterly basis. The notional amount decreased over the life of tha swap agreement, which was due to expire in December 2011. The notional amount of the agreement was $5,483333 at December 31,2007. Under the agreement, the Company paid or received the net interest amount monthly, with the monthly settlements included in interest expense. In 2006, management designated the interest rate swap agreement as a cash flow hedging instrument, and determined the agreement met the requirements for hedge accounting under OAAP. In August 2007, the debt to which this swap was related was retired. As a result, the amount previously recorded in other comprehensive income was charged to interest expense in October 2007 and any future changes to the fair value of the swap either increased or decreased interest expense as the contract no longer qualified as an accounting hedge. On Jury 15, 2008, the Company paid $237,200 to terminate the swap. The fair value of the derivative was $224,696 at December 31,2007, and is included in accrued liabilities on the consolidated balance sheet on that date. In December 2006, the Company received a $500,000 advance as part of a bridge financing agreement associated with the Charolais acquisition completed in January 2007. The advance was repaid in January 2007 and reissued as part of the full bridge financing of $4,135,600 denominated in Canadian dollars (approximately $3.5 million in U.S. dollars). The loan was repaid in August of 2007 resulting m a foreign currency exchange loss of approximately $418,000. Interest Expense Included in interest expense for the years ended December 31,2008 and 2007 is $955,048 and S2£54,999, respectively, for interest on indebtedness initially incurred for a term of more titan one year. NOTE H FINANCIAL INSTRUMENTS AND FINANCIAL RISK FACTORS The Company has exposure to credit risk, liquidity risk, interest rate risk, and foreign currency risk. The Companys risk management objective is to protect earnings and cash flow and, ultimately, shareholder value. Risk management strategies, |
PHOENIX COAL INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31,2008 and 2007 as discussed below, are designed and implemented to ensure the Companys risks and the related exposure are consistent with the business objectives and risk tolerance. Credit Risk: Credit risk is the risk of a financial loss to the Company if a customer or counterparty to a. financial instrument fails to meet its contractual obligation. The Company invests its cash and cash equivalents and short-term investments in a U.S. financial institution, which at December 31,2008, carried Standard and Poors investment ratings on their deposits of A to A-l. At December 31,2008, approximately 539,700,000 of the cash and cash equivalents balance was invested in a money market fund managed by mis financial institution. In January 2009, the Company reduced this money market balance to approximately $8,000,000, an amount that is guaranteed until April 30,2009 by the US, Treasury Department under the Temporary Guarantee Program for Money Market Funds. The Company has not experienced any losses on its deposits with this financial institution. The Company is also subject to credit risk from its trade accounts receivable. While economic factors can affect credit risk, the Company manages risk by providing credit terms on a case by case basis. Customers are primarily investment grade companies and quasi-governmental agencies. As a result, the Company has not experienced any instances of non-payment Subsequent to December 31,2008, the Company has collected all of its trade accounts receivable at December 31,2008. the Company also invests in short-term Investments issued by the United States government, such as Treasury bUIs and Treasury notes. Historically, these types of investments have been AAA rated, so the Company does not anticipate any risk related to default on these investments by the issuer. At December 31, 2008, the total fair value of assets subject to credit risk, including cash and cash equivalents (including restricted cash and investments], short-term investments, and trade accounts receivable totaled 155,108,371. Liquidity Rist Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they come due. The Company manages its liquidity by ensuring mat there is sufficient capital to meet short and long-term business requirements, after taking into account cash flows from operations and the Companys holdings of cash, cash equivalents and short-term investments. The Company also strives to maintain sufficient financial liquidity at all times in order to participate in investment opportunities as they arise, as well as to withstand sudden adverse changes in economic circumstances. Management forecasts cash flows for its current and subsequent fiscal years to predict future financing requirements. Future requirements are met through a combination of credit commitments and access to capital markets. At December 31,2008, the Company had $40.6 million of cash, cash equivalents, and short-term investments. The following are the maturities, excluding interest payments, reflecting undiscounfed future cash disbursements of the Companys financial liabilities based on years ending December 31: 2009 2010 to 2011 2012 and later Trade accounts payable and accrued liabilities ,..,..,,-.» $6,470,390 Long-term debt 6,532,045 S 12,252,703 $2^89,042 Other long-term liabilities ; 241,372 241,371 $13,002,435 $12,494,075 $2,630,413 Interest Rate Risk Interest rate risk is the risk borne by an interest-bearing asset or liability as a result of fluctuations in interest rates. Financial assets and financial liabilities with variable interest rates expose the Company to cash flow interest rate risk. The Companys most significant interest rate risk arises from its investments in marketable securities and cash equivalents. However, the maturity on these Instruments is generally less than ninety days, thereby mitigating the exposure to the impact of changing interest rates. |
PHOENIX COAL, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31,2008 and 2007 The Companys long-term debt consists of only fixed rate notes. The Company previously maintained a credit facility which bore variable interest rate based on LIBOR. This facility was retired on July 7,2008, The following represents the hypothetical annual future interest income that would be earned on the Companys cash and cash equivalents (including restricted cash and investments) and short-term investments, and the effect of a 1% change in the interest rates on these investments. The calculation uses the interest rates realized on these assets at December 31* 2008 and the balances of the investments at December 31,2008. Armualized Income Earned Using: Interest rates in effect at December 31,2008 ,, ,, S 834,200 Interest rates with a 1% decrease in rates.___,,,,.___,,»» _ ___319,300 Interest rates with a 1% increase in rates .«,,... ... ,,.««.,,. . 1,349,100 Currency Risk The Companys functional currency is the U.S. dollar and the Companys sales are denominated in U.S. dollars. As the Company operates m an international environment^ some of the Companys financial instruments and transactions are denominated in currencies other than the U.S. dollar. The results of the Companys operations are subject to currency transaction risk and currency translation risk. At December 31, 2008, the Company had no material financial instruments that were denominated in non U.S. currencies. Fair Values: At December 31,2008, the fair values of cash and cash equivalents (including restricted cash and investments), short-term investments, trade accounts receivable, and trade accounts payable and accrued liabilities approximated their carrying values because of die short-term nature of these instruments. The fair value of other long-term liabilities also approximated its carrying value. The fair value of the Companys long term debt, calculated using die present value of the scheduled debt payments, and using a credit adjusted risk free rate of 6,75%, was $21,052^00 at December 31,2008. NOTE IINCOME TAXES The components of income tax expense for the years ended December 31 are: 2QM 2007 Current ,,,^,... ,,..,, $37,838 $70,155 $37J3J $70.155 The Companys income tax provision in 2008 and 2007 is all currently payable and consists principally of state taxes. A reconciliation of the differences between the statutory U.S. federal income tax expense (benefit) and the Companys effective tax expense at December 31 is as follows: 2008 2007 Tax Amount Effective Rate Tax Amount Effective Rate Federal taxes at statutory rates $(10,998,379) 35.0% $(9,096,897) 35.0% State income texes.net of federal benefit . (1,093,424) 3.6% (865,526) 3.6% Permanent items: Share-based compensation 2,291,022 (7.3%) 0.0% Interest and fees on preferred shares 1,268,919 (4.0%) 1,072,977 (4.1%) Other permanent items 44,348 (0-1%) 58,325 (0-2%) Total current year permanent items 3,604,289 (11.4%) 1,131302 (43%) Change m valuation allowance attributable to current year activity 8,525,352 (27.2%) 8,901.276 (34.3%) Income tax expense ,,...,,.,. S 37,838 0-0% $70,135 0-0% |
PHOENIX COAL INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31,2008 and 2007 The expense for income taxes Includes federal and state income taxes currently payable or receivable and those deferred or prepaid because of temporary differences between the financial statement and the tax basis of assets and liabilities. The Company records income taxes under the liability method. Under this method, future income taxes are recognized for be estimated future tax effects of differences between the tax basis of assets and liabilities and their financial reporting amounts based on enacted laws. The future tax assets and liabilities recognized in the consolidated balance sheet are comprised of the following at December 31: ana ZQQ7 Future tax assets: Net operating toss carry forwards ___,,, . $23,820,480 $10,769,102 Share-based compensation ___« ,,.,.. 18,228 577,488 Asset retirement obligations ... ,,..,,.. 1,669,064 491,431 Mining rights ,, . , ; 928,016 Vacatioiiexpense ..-...,,,,...,, 79,370 Other ___568 1,702 25,587,710 12,767,739 Future tax liabilities: Mine development costs.. ,, . (426,708) (54,693) Mining rights. . (2,705,138) Royalty expense. ,,.._,, -,..-...,,,,,,,,..,,,, (190,073) Tax over book depreciation.^.. (7,884,915) (1,964,971) (1136334) (2,019,664) Total ..___» 14,380,876 10,748,075 Valuation allowance (14,380,876) (10,748,075) Net future taxes ,,,,, ...,,,,...,,..,,, $ $ As a result of losses from operations, management has recorded a valuation allowance against the total net future tax asset as they do not believe it is more likely man not these assets will be realized. At December 31,2008, the Company had available net operating loss (NOL) carry forwards, to reduce future taxable income of approximately S61,711,000 expiring through 2029. The future benefit of these NOL cany forwards may be limited on an annual basb and in total under Section 382 of me United States Internal Revenue Code as a result of prior ownership changes and depending on the extent of future ownership changes contemplated by the Company. As a result of its valuation allowance, the Company has not currently recognized any benefit for these losses in its consolidated financial statements. Net Operating Loss Carryovers (20 year carryover): Loat Expiring In Amount Expiring 2004 2025 $305,000 2026 1,860,000 2027 6,089,000 2028 19,648,000 2029 33,809.000 S 61,711,000 |
PHOENIX COAL INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31,2008 and 2007 NOTE JMAJOR CUSTOMERS For the years ended December 31,2003 and 2007 the Companys concentration of major customers was as follow*: MM 2007 Number of primary customers,. . ... . ,,...___3 3 Percentage of coal sales ,, .,,,,.. ,,,, 87% 89% Accounts receivable due at year end. ,,.,, ,,, ___. $2,410,395 S 2,285,240 The Company has never experienced non-payment from any of these customers. AU amounts due from these customers at December 31,2008 have subsequentiy been collected. NOTE K COMMITMENTS AND CONTINGENT LIABILITIES In the normal courae of business, the Company makes various coirnnitments and incurs certain contingent liabilities including liabilities related to asset retirement obligations and financial obhgations in connection with mining permits that are not reflected in the accompanying consolidated balance sheet. The Company does not anticipate any material losses as a result of these transactions. In accordance with Kentucky state law, the Company is required to post reclamation bonds to assure that reclamation work is completed. Outstanding reclamation bonds totaled approximately $11 million at December 31,2008 and approximately $9 million at December 31,2007. These bonds are secured by letters of credit or certificates of deposit issued by a bank equal to the amount of the outstanding reclamation bonds. At December 31, 2008, the letters of credit are collateralized by the restricted cash and certificates of deposit on the consolidated balance sheet of $11,638,921. At December 31,2007, the letters of credit were collateralized by general business assets of the Company and the restricted cash and certificates of deposit on the consolidated balance sheet of $2,312,500. Injury 2008, the Company agreed to increase its restricted cash collateral securing its letters of credit with its bank to 100% of the reclamation bonds outstanding. As a. result, the letters of credit are only collateralized by the restricted cash balance, and tite general business assets of the Company were released. The Company leases certain office space and mining equipment over long-term operating leases running through 2009. Future minimum lease commitments under non-cancekble operating leases as at December 31, 2008, payable in 2009, totaled S567.355. A significant amount of the Companys coal reserves are controlled through leasing arrangements and non-cancellable royalty lease agreements under which future minimum lease payments are due. In the ordinary course of business, the Company enters into contracts to purchase diesel fuel from local suppliers tor physical delivery at specified prices. Pursuant to these contracts, the Company does not own a futures or options position in the purchased fuel As at, and subsequent to, December 31,2008, the Company has executed purchase contracts for a total of 2,688,000 gallons to be delivered in 2009 at a total cost of $5,871,096, or an average weighted price of $2.18 per gallon. In 2008, the Company purchased over 5,000,000 gallons of diesel fuel for use at its owned or managed operations. As at, and subsequent to, December 31,2008, the Company has committed to purchase approximately $5,100,000 of mining equipment for its operations, with delivery scheduled during the first calendar quarter of 2009, The Company has received commitments from equipment finance companies to finance the purchase of the equipment, with interest rates ranging from 8.50% to 8.75%, terms of 36 to 48 months, and down payments totaling approximately $765,000. The notes will be collateralized by the equipment purchased. In conjunction with the sale of certain assets to Covol in 2007, the Company entered into a master coal purchase and sale agreement (me Master Agreement) to purchase coal fines recovered and processed by Covol from two coal slurry reserves areas in Muhlenberg County, Kentucky defined in the Master Agreement as the Rock Crusher Reserves and the National Guard Reserves (collectively, the Slurry Reserves). The term of the Master Agreement runs through the exhaustion of the Slurry Reserves (the Term). |
PHOENIX COAL INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31,2008 and 2007 At December 31, 2008, for the remaining Term of the Master Agreement, Covol is obligated to deliver not less than 60,000 tons of coal fines per month. The Company agrees that it will purchase from Covol, pursuant to the terns of the Master Agreement including certain BTU and quality specifications, ail of the coal fines produced by Covol from the Slurry Reserves up to 60,000 tons per month during the Term. The price for the coal fines shall be the contract price set form in each confirmation attached to the Master Agreement, provided, however, that in no event shall the contract price be less than S25.50 per ton for coal delivered from the Rock Crusher Reserves or $24.50 per ton for coal delivered from the National Guard Reserves. NOTE L STOCK INCENTIVE PLAN AND WARRANTS 2007Stock Option Man ofMCC MCC adopted an incentive stock option plan in May 2007 (the 2007 Plan) which provides that the board of directors of the Company may from time to time, in its discretion, and In accordance with TSX requirements, grant to directors, officers, employees and technical consultants to the Company, non-transferable options to purchase common shares, provided that me number of common shares reserved for issuance will not exceed 10% of the issued and outstanding common shares. Such options will be exercisable for a period of up to 5 years from the date of grant. Vesting terms will be determined at me time of grant by the Board of Directors. In 2007, upon closing of an initial public offering, MCC granted to its directors and officers options to acquire 150,000 share* at a price of Cdn$0.25 per share; exercisable for a period of five years from August 28,2007, The 2007 Plan remains ia force and options issued prior to the RTO will continue to be governed by the 2007 Plan; however due to me approval of the 2008 Plan (defined below), no further options will be issued pursuant to the 2007 Plan. 2004 Stock Incentive Plan of Phoenix Phoenixs 2004 stock incentive plan (the 2004 Plan) authorized Phoenixs board of directors to grant options to its employees (including officers), directors and consultants. Pursuant to the 2004 Plan, Phoenix could issue non-statutory options and incentive stock options* to purchase common shares of Phoenix as well as stock purchase rights. The number of common shares or rights of Phoenix authorized and reserved for issuance under the 2004 Plan was fixed at 8,297,411. Stock options granted under the 2004 Plan were generally subject to vesting provisions of 25% at the end-of-year one from the date of grant and then evenly over the following 48 months. The options were granted at a price equal to 100% of the fair value of the Companys common shares on the date of grant and have a ten-year term. Upon completion of the RTO, each Phoenix stock option was cancelled and extinguished and the holder received a replacement option of the Company to purchase diat number of common shares of the Company equal to the number of shares of Phoenix common shares issuable under the Phoenix option with no change in the exercise price of such options due to the nature of the exchange rate between United States dollars and Canadian dollars. 2008 Stock Option Plan of the Company In connection with completion of the RTO, the Company adopted a new stock option plan (the 200g Plan) on May 20, 2008, which was effective upon the closing of the RTO. The 2008 Plan is designed to advance the interests of the Company by encouraging employees, officers, directors and consultants to have equity participation in the Company through the acquisition of common shares. The current intention is to use the 2008 Plan for option grants to employees, officers, directors and consultants of the Company. Options granted under the 2008 Plan may be incentive stock options or non-qualified stock options. The 2008 Plan was approved by the shareholders of the Company in June 2008 and 13,500,000 common shares are reserved for issuance under the 2008 Plan. The exercise price per common share is not to be less man the market price of the common shares at the time of the grant The exercise period for each stock option is not to be more than ten years (five years in the case of an incentive stock option |
PHOENIX COALING NOTES TO CONSOLIDATES FINANCIAL STATEMENTS December 31,2008 and 2007 granted to a person who owns more than 10% of the issued and outstanding common shares). Options may be granted subject to vesting requirements. Unless terminated earlier by the board of directors, the 2008 Plan will remain in effect until all options granted under the 2008 Plan have been exercised or forfeited, or have expired. However, no new options may be granted under the 2008 Plan more than 10 yean from the date the Plan was originally adopted by the board of directors. Information regarding stock option activity under the Plans follows: 1008 Activity Number of Weighted Average 2004 Phoenix Plan Common Share Options Options Exercise Price Balance, December 31,2007 ,, ,,. 6,749,000 $0.87 Granted. ___,, ,, ,, 1,000 1.25 Exercised- (25,438) 0.25 Forfeited ,,., ., (1,413,562) 0.43 Options outstanding at December 31,2008 5,311,000 S0.98 Options exercisable at December 31,2008 , 2,986,495 $0.89 Options Denominated In Canadian Dollars Number of Weighted Average 2007 MCC Plan and 2008 Company Plan Optima Exercise Price Balance, December 31,2007 ,, ,, ,, 150,000 Cd»S0.25 Consolidated at 1:235 ..,, (86,170) Balance after consolidation. ~ . 63,830 Cdn 039 Granted under 2008 Plan . ...,, 9397,000 Cdn 1.32 Votantarily surrendered and cancelled under 2008 Plan ». (S.OSO.OOO) Cdn 1.75 Options outstanding atDecernber 31,2008 4,410,830 CdnS0.83 Options exercisable at December 31,2008 ,, 1,498340 odnST|,82 2007 Activity Number of Weighted Average 2004 Phoenix Plan Common Share Options Options Exercise Price Balance, December 31,2006 ,,. ,, ___,,.,, 3,045,000 $032 Granted,,.. ,, 4,004,000 1.25 Exercised ,, .___,,.. (300,000) 0,42 Options outstanding at December 31,2007 6,749,000 $0.87 Options exercisable at December 31,2007- ,, 2^09,050 S0.66 Compensation cost of stock option grants is recognized straight-line over the options* vesting periods. Compensation expense related to stock options for the years ended December 31, 2008 and 2007 was $5,935,289 and $948,859, respectively, In November 2008, members of the board of directors and two senior executives voluntarily surrendered, and the Board concurrently cancelled, 5,050,000 options that had been issued to them in June 2008 concurrent with the Offering, of which 1,683333 were fully vested at the surrender date. The voluntary surrender was not accompanied by a concurrent grant of a replacement award or other consideration to these executives. This surrender caused an acceleration of the related compensation costs under OCA Handbook Section 3870. Had these board members and employees not voluntarily surrendered these options, the related compensation expense for the 2008 fiscal year would have decreased by $2^47,250. |
PHOENIX COAL INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31,2008 and 2007 The options fair value was determined using the Black-Scholes option-pricing model. Expected volatilities are based on comparable company historical share price movement and other factors. The cost relating to the stock-based compensation plans U included in general and administrative expenses in the accompanying consolidated statements of operations. 2008 Company 2007Pftoenn 2007 MCC Weighted average fair value per share of options granted $0.67 per share $0.73 per share S0.21 per share Assumptions (weighted average): Risk-free interest rate 3.98% 4.37% 4.75% Expected dividend yield- 0.00 0.00 0.00 Expected volatility... ...,,..,,..,,,..,,,..,,. 0.40 0.40 1.25 Expected option life (in years) 10.OO 10.00 5.00 At December 31,2008, the following stock options were outstanding: Number of Options Exercise Price ___Expiration Date 683,000 $0.23 April, 2015 465,000 0.25 December, 2015 360,000 0.50 May. 2016 920,000 1.25 March, 2017 2,883,000 125 November, 2017 63,830 CdnOJg August, 2012 1,797,000 Cdnl.75 June, 2018 2.550,000 CdaO.18 November, 2018 9.72^830 Phoenix Warrants As part of the fee structure related to Phoenixs preferred share offering In August 2007, the underwriter received warrants to purchase 1,780,000 shares of the preferred shares of Phoenix at $1,25 per share. The warrants expire 24 months allowing the date Phoenix consummates an initial public offering of its common shares. The warrants total value of $462,800 was determined using the Black-Scholes option pricing model. Assumptions used m the model were a risk free interest rate of 4.76%, dividend yield of 6.50%, and expected volatility of .40. The value of the warrants was charged to additional paid in capital. On June 27,2008, under the terms of the Broker Agreement, the warrants were converted to warrants to purchase common shares of the Company at $1.25 per common share and expire in June 2010. Company Warrants Under the terms of the Offering, 31,428,580 warrants were issued to the purchasers of the common shares offered. The warrants entitle the holder to purchase one common share for each warrant held at a price of Cdn$2.25 per share. The warrants expire on June 25,2010. The warrants total value of $8,077,345 was determined by the underwriter of the Orxering. The value of the warrants was charged to share capital. |
PHOENIX COAL INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31,2008 and 2007 Information regarding the warrant activity follows: Weighted Number of Average Exercise Phoenix Preferred Share Warrants Warrants Friea Balance, December31,2007. 1,780,000 S1.25 Converted preferred warrants to common warrants, ,, (1,780,000) 1.25 Warrants outstanding at December 31,2008 ,, ,, &=^ Weighted Number of Average Exercise Phoenix Common Share Warrants Warrants Price Balance, December 31,2007 _ ... . $ Converted preferred warrants to common warrants ,, ...,, 1,780,000 1.25 Warrants outstanding at December 31,2008 1,780,000 SL25 Warrants exerdsable at December 31,2008 ,, 1,780,000 n^ Weighted Warrants Denominated in Canadian Dollars Number of Average Exercise Company Common Share Warrants Warrants Price Balance, December 31,2007 ,,.,, ,, ,, 100,000 Cdn$0.25 Consolidated at 1:2.3S ,, (57.447) Balance after consolidation.. ,,..___,, 42^53 Cdn 0.59 Exercised (11,850) Cdn 0.59 Warrants issued with new common shares .. ..._,___31,428,580 Cdn 155 Warrants outstanding at December 31,2008 ~ 31,459,283 CdnSZ.25 Warrants exercisabk at December 31,2008 ___,. 31,45933 Crin:82.25 At December 31,2008 the following warrants were outstanding: Number of Warrants Exercise Price Expiration Pate 1,780,000 $1.25 June, 2010 30,703 Cdn 0.59 September, 2009 31.428.580 Cdn 2.25 June, 2010 31?J9.283 Total cash received from options and warrants exercised during the years ended December 31, 2008 and 2007 totaled $12,838 and $125,000, respectively. Broker Options Under the terms of the Offering, the agents received Brokers Options entitling the agents to purchase in the aggregate 2,514,286 Brokers Units. Each Broker Unit entitles the agent to purchase one common share for CdnS1.75 per share and one half warrant entitling the agent to purchase one additional common share for each full warrant at CdoS2.25 per share. The Brokers Options expire on June 25, 2010 and are all exercisable at December 31, 2008. The options total value of $1,I06,28<5 was determined using the Black-Scholes option pricing model. Assumptions used in the model were a risk free interest rate of 3.99%, no dividend yield, and expected volatility of .40. The value of the options was charged to sham capital as a cost of the Offering. |
PHOENIX COAL INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31,2008 and 2007 Stuck Grants In December 2007, the Company Issued 400,000 restricted shares to four of int directors. The shares were valued at $500,000 and the related expense is included in general and administrative expenses. At the date of issue, the shares could not be sold until the Company closed a public offering of its shares. Following the Offering in June 2008, ihe shares are no longer restricted. NOTE M DEFINED CONTRIBUTION FLAN The Company has a retirement savings trust plan in effect for substantially all full-time employees. The Plan also contains a deferred salary arrangement under IRC Section 401(k). Under the deferred salary arrangement; employees can contribute up to 100% of their earnings and the Company may match a portion of the employee contributions. The Company paid and charged to operations approximately $629,000 and $556,000 for the years ended December 31,2008 and 2007, respectively, for Plan contributions. NOTE N RELATED PARTY TRANSACTIONS The Company enters into transactions with shareholders and/or affiliated entities that have some level of common ownership with the Company. A summary of the related parry transactions and balances follows for the years ended December 31,2008 and 2007: 20OS SWOT Expenses: Consulting tees, ___$156,000 $610,000 Rent and miscellaneous ,,,,.,,,,... ,, . ~..~. 32^25 65377 Accounts receivable-. ,,.,,,,_,,. ,..,,.,,.^,,,> ... 16,858 Accounts payable . ..,,.,,,,...___, ,,,,.,,...,.,,.. ...,. ..,, 6,670 The above expense amounts were paid to MHI Energy Partners, LLC, which amounts were applied towards, among other things, salaries, overhead and benefits for Individuals who provided services. These transactions are also in the normal coarse of business, and are recorded at the consideration established and agreed to by the related parties. David Wiley and Timothy Fogarty were managing directors of MHI Energy Partners, LLC. David Wiley is currently an officer and director of the Company and Phoenix, and Tim Fogarty resigned as a director of Phoenix hi September 2008. During the second quarter of 2008, the Company discontinued these payments to MHL NOTE O SUBSEQUENT EVENTS On January 8,2009, the Company announced mat It received a 404 Permit granted by the US. Army Corps of Engineers (COE), With the 404 Permit, the Company secured all of the necessary permits to begin mining on the Radio Hill section of the Briar Hill surface mine (Radio HUT) in Muhlenberg County, Kentucky. During December 2008, Phoenix had obtained a permit required under Section 401 of the Clean Water Act (401 Permit) and a state mining permit granted by the KDNR for Radio HilL On March 4,2009, the Company announced that It received a 404 Permit for its Winn North property, which is part of the Back in Black mine. With the 404 Permit, vie Company secured all of the necessary permits to begin mining on Winn Norm in Muhlenberg County, Kentucky. During December 2008, Phoenix had obtained a 401 Permit and a state mining permit granted by the KDNR for Winn Norm. In addition, the Company announced it received two out of the three required permits for KO. The state mining permit from the KDNR had been Issued conditionally, pending the outcome of a phase one archaeological study. When the phase one study is complete the condition will be lifted; however, the conditional permit allows for initial development of KO. The 404 Permit, which was originally protested in September 2008, is still outstanding on this property. |
PHOENIX COAL INC. NOTES TO CONSOLIDATED HNANCIAL STATEMENTS December 31,2008 and 2007 On March 3, 2009, the Company entered into a mutual release and settlement agreement with one of its customers to terminate a coal supply agreement for delivery of coal in 2009 and 2010 (the 2009/2010 Supply Agreement). la consideration for terminating the 2009/2010 Supply Agreement, the Company paid the customer $3,000,000 in cash. The payment relieved die Company of the obligation to deliver approximately 970,000 tons of coal, 470,000 in 2009 and 500,000 in 2010. In addition, the Company agreed to make up in 2009 approximately 170,000 tons of shipments that were not delivered in 2008 under a separate coal supply agreement dated January 1,2008 (the 2008 Supply Agreement). In return for fulfilling the 2008 Supply Agreement, the customer agreed to change the guaranteed monthly average BTU specification from 11,500 to 11,200. The S3.00O.O00 payment will be charged to the consolidated statement of operations in 2009. |
Interim Financial Statements of PHOENIX COAL INC. For the three and six months ended June 30,2009 (Unaudited- Prepared by Management) Managements Comments on Unaudited Interim Financial Statements The accompanying unaudited interim financial statements of Phoenix Coal Inc. for the three and six months ended June 30, 2009 have been prepared by management and approved by the Board of Directors of the Company. These statements have not been reviewed by the Companys external auditors. |
PHOENIX COAL INC. CONSOLIDATED BALANCE SHEETS (Expressed in U.S. Dollars) June 30, December 31, Note 2009 2008 (unaudited) ASSETS Current Assets Cash and cash equivalents 7 $17,694,780 $40,525,609 Short-term investments 7 3,078,875 100,707 Trade accounts receivable 7 3,288,714 2,843,134 Coal inventories 2 452,558 Prepaid expenses and other current assets 1,046,986 470,506 Restricted cash, cash equivalents and certificates of deposit 7,8 5,849,000 Assets held for sale 2 28,718,201 Total current assets 59,676,556 44,392,514 Property, Plant and Equipment, net 4 906,060 46,037,904 Restricted Cash, Cash Equivalents and Certificates of Deposit 7,8 6,668,297 11,638,921 Mining Rights, Mine Development Costs and Mineral Reserves, net of accumulated amortization of nil as at June 30,2009 and 53,888,082 as at December 31,2008 3 43,499,589 52,582,655 Other Assets 574,531 492,520 $111,325,033 $155,144,514 LIABILITIES AND SHAREHOLDERS EQUITY Current Liabilities Trade accounts payable and accrued liabilities $8,243,534 $6,470,390 Vendor financing 3 3,000,000 Current portion of long-term debt 2,6 6,532,045 Current portion of asset retirement obligations 5 2,300,000 1,958,000 Liabilities associated with assets held for sale 2 25,184,215 Total current liabilities 38,727,749 14,960,435 Asset Retirement Obligations, less current portion 5 38,070 2,366,000 Long-term Debt, less current portion 2,6 14,641,745 Other Long-term Liabilities 436,189 482,743 Shareholders Equity Sharecapital 171,817,981 171,817,981 Stock options and warrants 9 18,490,724 16,625,724 Accumulated deficit (118,185,680) (65,750,114) 72,123,025 122,693,591 $111,325,033 $155,144,514 See accompanying notes to consolidated financial statements |
PHOENIX COAL INC. CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (Expressed in U.S. Dollars) (Unaudited) For the Three and Six Months Ended June 30,2009 and 2008 Three Months Ended Six Months Ended Note June 2009 June 20O8 June 2009 June 2008 Revenue $17,320,379 $21,326,102 S 35,292,271 $39,821,562 Cost and Expenses Cost of sales 17,019,692 21,199,549 31,763,409 38,684,869 Selling expenses 1,852,362 2,074,001 4,008,043 4,144,935 General and administrative expenses 9 2,004,939 3,813,178 5,602,583 5,412,290 Depreciation and amortization 1,907,711 2,043,344 3,731,492 3,107,176 Write down of assets held for sale 2 38,920,000 38,920,000 Sales contract termination cost 10 3,000,000 61,704,704 29,130,072 87,025,527 51,349,270 Loss from operations (44,384,325) (7,803,970) (51,733,256) (11,527,708) Other Income (Expense) Interest expense, including accretion 2,6 (424,723) (2,765,589) (784,625) (5,124,968) Interest income 21,789 14,060 98,478 26,721 Foreign currency (loss) gain (103,710) 129,130 Other, net (3,329) (37,302) (6,082) (215,152) (406,263) (2,892,541) (692,229) (5,184,269) Loss before income taxes (44,790,588) (10,696,511) (52,425,485) (16,711,977) Income taxes (benefit) 10,081 (879) 10,081 (879) Net loss and comprehensive loss $(44,800,669) $(10,695,632) $(52,435,566) $(16,711,098) Basic and diluted loss per share $(0.30) $(0.25) $(0.35) $(0.42) Weighted average number of common shares outstanding 150,045,552 42,036,051 150,045,552 39,868,745 See accompanying notes to consolidated financial statements |
PHOENIX COAL INC. CONSOLIDATED STATEMENTS OF SHAREHOLDERS EQUITY (Expressed in U.S. Dollars) (Unaudited) For the Six Months Ended June 30,2009 and Year Ended December 31,2008 Common Shares (unlimited Stock Options authorized) and Accumulated Note Shares Dollars Warrants Deficit Total December 31,2007 37,701,440 $22,426,771 S 1,458,884 $ (33,109,913) S (9,224,258) Share capital contribution common shares issued in payment of loan fees 408,163 510,204 510,204 Issuance of common shares to settle debt 8,668,000 10,276,682 10,276,682 Conversion of preferred shares, including accrued dividends, to common shares 39,386,270 48,922,722 48,922,722 Value of additional shares issued in payment of debt 808,258 (808,258) Share-based compensation - options 9 260,000 260,000 Balances pre merger, pre share issue, and prior to recording loss for the year 86,163,873 82,944,637 1,718,884 (33,918,171) 50,745,350 Marimba Capital Corp. equity balances pre-merger 2,320,000 347,514 48,120 (88,255) 307,379 Marimba Capital shares consolidated on the basis of 1 share for every 2.35 shares outstanding (1,332,769) ¦ Reverse takeover adjustment (88,255) 88,255 Reverse takeover costs incurred (408,000) (408,000) Tssuance of common shares 1 62,857,160 97,784,678 97,784,678 Issuance of warrants 9 (8,077,145) 8,077,145 Issuance of broker options 9 (1,106,286) 1,106,286 Share-based compensation options 9 5,675,289 5,675,289 Options and warrants exercised 9 37,288 12,838 12,838 Net loss (31,423,943) (31,423,943) December 31,2008 150,045,552 171,817,981 16,625,724 (65,750,114) 122,693,591 Share-based compensation options 9 1,865,000 1,865,000 Net loss : (52,435,566) (52,435,566) June 30,2009 150,045,552 $171,817,981 $18,490,724 $(118,185,680) $72,123,025 See accompanying notes to consolidated financial statements |
PHOENIX COAL INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (Expressed In U.S. Dollars) (Unaudited) For the Three and Six Months Ended June 30 Three Months Ended Six Months Elided Note June 2009 June 2008 June 2009 June 2008 Cash Flow From Operating Activities Net loss $(44,800,669) $ (10,695,632) $ (52,435,566) $ (16,711,098) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation and amortization 1,907,711 3,296,291 3,731,492 5,424,704 Loss on sale of property and equipment 1,730 37,202 1,730 214,057 Write down of assets held for sale 2 38,920,000 38,920,000 Interest rate swap (120,501) (15,160) Foreign currency loss (gain) 103,710 (129,130) Share-based compensation 9 6,000 2,151,277 1,865,000 1291,277 Asset retirement obligations 5 73,404 47,283 (67,949) 94,566 Dividends accrued on preferred shares 703,344 1,467,165 Changes in non-cash operating assets and liabilities: Accounts receivable 2,218,434 209,615 (445,580) 297,558 Inventories (304,825) 136,150 (425,283) 812,560 Prepaid expenses and other current assets (469,097) 197,521 (576,480) 203,488 Trade accounts payable and accrued liabilities (556,124) (633,470) 1,773,144 2,315,908 Net cash used in operating activities (3,003,436) (4,567,210) (7,659,492) (3,734,105) Cash Flow From Investing Activities Reacted cash, cash equivalents, and certificates of deposit 7,8 (148,127) 122,900 (1,377,960) 86,425 (Payments for) proceeds from investments (2,477,578) 153,100 (2,478,584) 153,100 Payments for other assets, principally mine development (1.182J983) (166,910) (1,720,693) (1,043,559) Proceeds from sale of property and equipment 10,000 30,000 10,000 403,300 Payments for property and equipment 4 (986,315) (179,366) (1,851,441) (214,512) Net assets acquired in merger, prior to public offering 307,379 307,379 Acquisitions (25,000,000) (25,000,000) Acquisition of mining rights 3 (3,307,259) Net cash used in investing activities (4,785,003) (24,732,897) (10,725,937) (25,307,867) Cash Flow From Financing Activities Principal payments on debt 2,6 (75,901) (202,407) (167,152) (400,984) Proceeds from debt 4,891,890 4,891,890 Payments on equipment financing 2,6 (2,010,172) (1,236,536) (4,231,694) (2,022^31) Line of credit (3,050,000) Reverse takeover costs incurred (408,000) (408,000) Decrease in other long-term liabilities (29,177) (25,364) (46,554) (30,654) Net proceeds from capital contributions 1 97,784,678 97,784,678 Net cash (used in) provided by financing activities (2,115,250) 97,754,261 (4,445,400) 99,814,699 Net (Decrease) Increase in Cash and Cash Equivalents (9,903,689) 68,454,154 (22,830,829) 70,772,727 Cash and Cash Equivalents, Beginning of Period ___. 27,598,469 2,699,947 40.525,609 381,374 Cash and Cash Equivalents, End of Period ,, $17,694,780 $71,154,101 $17,694,780 $71.154,101 Supplemental Disclosure: Interest paid $409,723 $803.398 $769,625 $1,218,152 Non-Cash Investing and Financing Activities: Vendor financing for equipment purchases $734,000 $4,797,889 S 5,821,290 $7,088,637 Vendor provided financing for acquisition of mining rights . » 3 000000 $ See accompanying notes to consolidated financial statements |
PHOENIX COAL INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Three and Six Months Ended June 30,2009 and 2008 (Unaudited) NOTE 1 NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Nature of Operations: The Company is engaged in the production and sale of steam coal to utilities and industrial fuel consumers. The Companys mining activities are currently limited to one reportable business segment, which is the Illinois Basin. On June 27, 2008, Phoenix Coal Corporation (Phoenix) completed a reverse takeover (RTO) of Phoenix Coal Inc. (the Company), formerly Marimba Capital Corp. (MCC), which was previously listed on the TSX Venture Exchange. MCC was incorporated under the Business Corporations Act (Alberta) on February 8,2007 and was classified as a Capital Pool Company as defined in the TSX Venture Exchange Policy 2.4 and, accordingly, had no assets other than cash and no commercial operations. MCC changed its name to Phoenix Coal Inc. on June 25, 2008. Phoenix, a U.S. company headquartered in Madisonville, Kentucky with a satellite office in Louisville, Kentucky, was formed in July 2004 as a Delaware C corporation and was originally named Dynamic Separations, Inc. (DSI). Where the context requires, in respect to transactions prior to the RTO, the Company also refers to Phoenix. Principles of Consolidation: Pursuant to the RTO transaction, these consolidated financial statements reflect the assets, liabilities and results of operations of Phoenix prior to the RTO and the consolidated assets, liabilities and results of operations of the Company and Phoenix subsequent to the RTO. The consolidated financial statements are issued under the name of the legal parent (the Company), but are deemed to be a continuation of the legal subsidiary (Phoenix). The consolidated financial statements include Phoenix Coal Inc. and its subsidiaries, all of which are wholly-owned. Basis of Presentation: The accompanying interim consolidated financial statements of the Company have been prepared in accordance with Canadian generally accepted accounting principles (GAAP) for interim financial statements and accordingly do not include all disclosures required for annual financial statements. All monetary references expressed in these notes are references to United States dollars, except occasional references to Canadian dollar amounts, where the dollar amount is preceded by Cdn (CdnS). With the exception of new accounting pronouncements discussed in this note, these interim consolidated financial statements follow the same significant accounting policies and methods of application as the Companys audited annual consolidated financial statements for the year ended December 31, 2008 (the Annual Financial Statements)- The interim consolidated financial statements should be read in conjunction with the Annual Financial Statements. In the opinion of management, all adjustments (including normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for these interim periods are not necessarily indicative of the results that may be expected for the full fiscal year ending December 31,2009. Assets Held for Sale: In the second quarter 2009, the Company initiated a process to consider various strategic opportunities, including, but not limited to, the sale of some or all of its coal mining assets and operations. As further discussed in Note 2, subsequent to the end of the second quarter 2009, the Company entered into a definitive agreement to sell substantially all of its surface coal mining assets. Pursuant to Canadian Institute of Chartered Accountants (CICA) Section 3475, Disposal of Long-Lived Assets and Discontinued Operations, and Emerging Issues Committee (EIC) Abstract No. 161, Disconti nued Operations, the Company has classified its surface mining assets and liabilities related to the pending sale, as assets and liabilities held for sale. The Companys underground coal mining assets do not meet the definition of assets held for sale, and therefore have not been classified as such in these financial statements. As the Company will not have substantial continuing operations subsequent to the sale, discontinued operations accounting has not been applied in these financial statements. Reverse takeover accounting: The RTO was completed on June 27, 2008. Prior to the completion of the RTO, MCC affected a reverse split of its outstanding common shares on the basis of 1 new share for each 2.35 shares outstanding. Pursuant to the RTO, the Company issued one common share for each outstanding common share of Phoenix. In addition, warrants and options to purchase Phoenix common shares outstanding immediately prior to the RTO were replaced with warrants and options to purchase an equivalent number of common shares of the Company, on economically equivalent terms and conditions. |
PHOENIX COAL INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Three and Six Months Ended June 30,2009 and 2008 (Unaudited) Concurrent with the RTO, the Company raised $97,784,678, net of issuance costs, in a prospectus offering (the Offering) of 62,857,160 subscription receipts priced at Cdn$1.75. In connection with the RTO, each subscription receipt was exchanged for one unit, each unit consisting of one common share and one half common share purchase warrant exercisable until June 25,2010 at Cdn$2.25 per share. The acquisition of the shares of Phoenix was accounted for as an RTO transaction in accordance with guidance provided in EIC-10, As MCC did not qualify as a business for accounting purposes, the transaction was accounted for as a capital transaction of Phoenix. New Accounting Policies: Goodwill and Intangible Assets: The CICA has issued a new standard, CICA Section 3064, Goodwill and Intangible assets, which establishes revised standards for recognition, measurement, presentation and disclosure of goodwill and intangible assets and is effective January 1, 2009. Concurrent with the introduction of this standard, the CICA withdrew EIC-27, Revenues and Expenses during the pre-operating period. This standard has had no material impact on the Companys consolidated financial statements. Financial Instruments: The EIC has issued EIC-173, Credit Risk and the Fair Value of Financial Assets and Financial Liabilities, which clarifies the application of credit risk when determining the fair value of financial assets and liabilities. EIC-173 is effective for interim and annual financial statements for periods ending on or after January 20, 2009. This standard has had no material impact on the Companys consolidated financial statements. Mining Exploration Costs: The EIC has issued EIC-174, Mining Exploration Costs, which discusses the circumstances under which exploration costs may be capitalized. Additionally, EIC-174 clarifies the timing for testing capitalized exploration costs for impairment. EIC-174 is effective for interim and annual financial statements issued after March 27, 2009. This standard has had no material impact on die Companys consolidated financial statements. Future Accounting Changes: International Financial Reporting Standards (IFRS): In 2006, the Canadian Accounting Standards Board (AcSB) published a new strategic plan that will significantly affect financial reporting requirements for Canadian companies. In February 2008, the AcSB announced that Canadian GAAP for publicly accountable enterprises will be converged with IFRS effective in calendar year 2011. The Company will adopt IFRS for the fiscal year beginning January 1, 2011, with restatement for comparative purposes of amounts reported by the Company for the fiscal year beginning January 1,2010. The Company is currently in the planning phase of the conversion, which includes identifying potential differences between GAAP and existing IFRS as at June 30, 2009, as well as proposed IFRS which may be in effect in 2011. The Company is utilizing both internal and external resources to identify and ultimately quantify these differences and the impact that they will have on accounting policies, information technology and data systems, internal control over financial reporting, disclosure controls and procedures, financial reporting, and business activities. Employees responsible for financial reporting have attended IFRS training, have begun IFRS accounting policy development, and initiated development of an IFRS project timeline Quantification of GAAP and IFRS differences has not yet been determined due to the need to evaluate internal data and make final policy choices and elections. Reclassiftcations: Certain of the 2008 figures have been reclassified to conform to the 2009 financial statement presentation. NOTE 2 ASSETS HELD FOR SALE Subsequent to the en d of the second quarter 2009, the Company entered into a definitive agreement with a privately owned coal producer to sell substantially all of the operating assets and operations, including coal reserves, mining property, plant and equipment, mining rights, coal purchase contracts and coal sales contracts associated with its surface coal mining operations in Western Kentucky. All of the Companys current revenues are derived from these operations. |
PHOENIX COAL INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Three and Six Months Ended June 30,2009 and 2008 (Unaudited) The consideration which will be received upon closing includes $5,7 million in cash, assumption by the purchaser of all debt associated with the equipment being sold and the assumption of certain reclamation liabilities related to the coal reserves. In addition, the purchaser will replace the Companys letters of credit for assumed reclamation obligations, which, upon transfer of the active mining permits, will release the restrictions on approximately $5.8 million of restricted cash and certificates of deposit. The Company can potentially receive an additional $1.0 million, upon satisfaction of certain post-closing obligations. The closing of the transaction is subject to certain closing conditions, including closing conditions related to satisfying the purchaser as to the size and quality of the coal reserves. As a consequence of the above, at June 30,2009, the assets and liabilities associated with the sale of the Companys surface mining operations have been classified as current assets and current liabilities held for sale and shown separately on the balance sheet Furthermore, effective June 30, 2009, the property, plant and equipment, mining rights, mine development costs and mineral reserves being sold have been written down to the amount expected to be realized on sale, namely the cash to be received plus the amount of the liabilities being assumed by the purchaser on closing, less costs to sell. This resulted in a write down of assets held for sale in the amount of $38,920,000 in the three months ended June 30,2009. Assets and liabilities held for sale on the consolidated balance sheet include the following amounts: June 30, 2009 Current assets Coal inventories $877,841 Property, plant and equipment, net 27,719,034 Other assets 121,326 $28,718,201 Current liabilities Asset retirement obligations $2,587,981 Term debt 22,596,234 $25,184,215 Term Debt June 30, 2009 Bank notes payable, interest at 5.50% to 8.90%. Payments are made in monthly installments. The loans are collateralized by various pieces of equipment and mature April 2010 $66,810 Equipment notes payable, interest at 5.25% to 8.75%. Payments are made in monthly installments. The loans are collateralized by related assets with a net book value of $31,258,000 as at June 30, 2009 and have maturity dates from August 2010 to March 2013 22,529,424 Total term debt associated with assets held for sale $22,596,234 NOTE 3 ACQUISITIONS Petersburg Coal Sublease In March 2009, the Company entered into a sublease agreement with Petersburg Coal, LLC (Petersburg) to sublease mineral reserves which are contiguous to its Gryphon Mining Complex, formerly known as the Pratt Mine. Under the terms of the sublease, the Company paid $3,000,000 at closing, assumed $192,178 in liabilities, and will pay an additional $3,000,000 upon satisfactory completion of certain contingencies, including receipt of all required permits from Petersburg. The Company also incurred transaction costs related to the sublease of $115,081, bringing the total cost of the sublease to $6,307,259. A mineral reserve and mineral resource evaluation prepared in accordance with National Instrument 43-101 (NI43-101) of the Gryphon Mining Complex was prepared as at April 1, 2009 by an independent geological and engineering consulting firm. Based on the report, at the Gryphon Mining Complex the Company controls 68.4 million tons of proven and probable |
PHOENIX COAL INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Three and Six Months Ended June 30,2009 and 2008 (Unaudited) coal mineral reserves, 3.7 million tons of underground measured and indicated coal resources, and 0.2 million tons of inferred coal resources. The costs of the sublease were allocated to the following identifiable assets: Prepaid royalties $172,413 Mining rights 6,134,846 $6,307,259 The Company is in the process of finalizing its valuation of the assets acquired and liabilities assumed for this sublease. The above allocations are preliminary estimates of fair value and may differ from the final allocation and the differences may be material. The Company will finalize the allocations within one year of the execution of the sublease. NOTE 4 PROPERTY, PLANT AND EQUIPMENT, NET Property, plant and equipment consist of the following: December 31, June 30,2009 2008 Accumulated Net Book Net Book Cost Depreciation Value Value Land $879,327 $ ___$879,327 $1,474,574 Building and improvements 17,726 Preparation plant 2,737,352 Mining equipment 40,128,200 Loading and marine transport equipment 1,434,792 Office equipment 35,688 8,955 26,733 212,278 Vehicles 32,982 S 915,015 $8,955 $906,060 $46,037,904 Property, plant and equipment related to the Companys surface mining operations have been reclassified as current assets held for sale as at June 30,2009 as further described in Note 2. NOTE 5 ASSET RETIREMENT OBLIGATIONS The Company estimates its ARO liabilities for final reclamation and mine closure based upon detailed engineering calculations of the amount and timing of the future cash spending for a third party to perform the required work. Spending estimates are escalated for inflation and then discounted at the credit-adjusted risk-free rate. The Company records an ARO asset associated with the discounted liability for final reclamation and mine closure. The obligation and corresponding asset are recognized in the period in which the liability is incurred. The ARO asset is amortized on the units-of-production method and the ARO liability is accreted to the projected spending date. As changes in estimates occur (such as mine plan revisions, changes in estimated costs or changes in timing of the performance of reclamation activities), the revisions to the obligation and asset are recognized at the appropriate credit-adjusted risk-free rate. The Company also recognizes an obligation for contemporaneous reclamation liabilities incurred as a result of surface mining. Contemporaneous reclamation consists primarily of grading, topsoil replacement, and revegetation of backfilled pit areas. |
PHOENIX COAL INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Three and Six Months Ended June 30,2009 and 2008 (Unaudited) A progression of the asset retirement obligations recorded on the consolidated balance sheet is as follows: Total asset retirement obligations as at December 31,2007 $3,757,353 Liabilities acquired 1,131,000 Liabilities incurred 166,083 Accretion 189,132 Liabilities settled (919,568) Total asset retirement obligations as at December 31,2008 , 4,324,000 Liabilities incurred 670,000 Accretion 146,805 Liabilities settled (214,754) Total asset retirement obligations as at June 30, 2009 4,926,051 Less current portion 2,300,000 Less asset retirement obligations associated with assets held for sale 2,587,981 $38,070 NOTE 6 DEBT Long-term debt consists of the following: June 30, December 31, 20O9 2008 Bank notes payable, interest at 5.50% to 8.90%. Payments are made in monthly installments. The loans are collateralized by various pieces of equipment and mature April 2010 $ $105,109 Equipment notes payable, interest at 5.25% to 8.75%. Payments are made in monthly installments. The loans are collateralized by related assets with a net book value of $31,258,000 as at June 30, 2009 and have maturity dates from August 2010 to March 2013 21,068,681 Total long-term debt 21,173,790 Less current portion 6,532,045 $ $14,641,745 Long-term debt associated with the Companys surface mining operations has been reclassified as current liabilities associated with assets held for sale as at June 30,2009 as further described in Note 2. NOTE 7 FINANCIAL INSTRUMENTS AND FINANCIAL RISK FACTORS The Company has exposure to credit risk, liquidity risk, interest rate risk, and foreign currency risk. The Companys risk management objective is to protect earnings and cash flow and, ultimately, shareholder value. Risk management strategies, as discussed below, are designed and implemented to ensure the Companys risks and the related exposure are consistent with its business objectives and risk tolerance. Credit Risk: Credit risk is the risk of a Financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligation. The Company had invested approximately $15,630,000 of its cash and cash equivalents (including restricted cash and investments) and short-term investments in a U.S. financial institution, which as at June 30, 2009, carried Standard and Poors investment ratings on their deposits of A-2 to BBB+. As at June 30,2009, approximately 83,343,000 of the cash and cash equivalents balance was invested in a money market fund managed by this financial institution, which is guaranteed until September 18, 2009 by the U.S. Treasury Department under the Temporary Guarantee Program for Money Market Funds. The Company has not experienced any losses on its deposits with mis financial institution. |
PHOENIX COAL INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Three and Six Months Ended June 30,2009 and 2008 (Unaudited) The Company is also subject to credit risk from its trade accounts receivable. While economic factors can affect credit risk, the Company manages risk by providing credit terms on a case by case basis. Customers are primarily investment grade companies and quasi-governmental agencies. As a result, the Company has not experienced any instances of non-payment The Company also invests in short-term investments issued by the United States government, such as Treasury bills and Treasury notes. Historically, these types of investments have been AAA rated, so the Company does not anticipate any risk related to default on these investments by the issuer, As at June 30, 2009, the total fair value of assets subject to credit risk, including cash and cash equivalents (including restricted cash and investments), short-term investments, and trade accounts receivable is their carrying value of $36,579,666. Liquidity Risk: Liquidity risk is the risk mat the Company will not be able to meet its financial obligations as they come due. The Company manages its liquidity by ensuring that there is sufficient capital to meet short and long-term business requirements, after taking into account cash flows from operations and the Companys holdings of cash, cash equivalents and short-term investments. The Company also strives to maintain sufficient financial liquidity at all times in order to participate in investment opportunities as they arise, as well as to withstand sudden adverse changes in economic circumstances. Management forecasts cash flows for its current and subsequent fiscal years to predict fiiture financing requirements. Future requirements are met through a combination of credit commitments and access to capital markets. As at June 30, 2009, the Company had S20.8 million of cash, cash equivalents, and short-term investments. Merest Rate Risk- Interest rate risk is the risk borne by an interest-bearing asset or liability as a result of fluctuations in interest rates. Financial assets and financial liabilities with variable interest rates expose the Company to cash flow interest rate risk. The Companys most significant interest rate risk arises from its short-term investments and cash equivalents. However, the maturity on these instruments is generally less than ninety days, thereby mitigating the exposure to the impact of changing interest rates. The Companys long-term debt consists of only fixed rate notes. Currency Risk The Companys functional currency is the U.S. dollar and the Companys sales are denominated in U.S. dollars. As the Company operates in an international environment, some of the Companys financial instruments and transactions are denominated in currencies other than the U.S. dollar. The results of the Companys operations are subject to currency transaction risk and currency translation risk. As at June 30, 2009, the Company had no material financial instruments that were denominated in non U.S. currencies. NOTE 8 COMMITMENTS AND CONTINGENT LIABILITIES In the normal course of business, the Company makes various commitments and incurs certain contingent liabilities including liabilities related to asset retirement obligations and financial obligations in connection with mining permits that are not reflected in the accompanying consolidated balance sheet. The Company does not anticipate any material losses as a result of these transactions. In accordance with Kentucky state law, the Company is required to post reclamation bonds to assure that reclamation work is completed. Outstanding reclamation bonds related to surface mining operations totaled approximately $12.5 million as at June 30, 2009 and approximately $11.0 million as at December 31, 2008. These bonds are secured by letters of credit or certific ates of deposit issued by a bank equal to the amount of the outstanding reclamation bonds. The letters of credit are collateralized by the restricted cash and certificates of deposit on the consolidated balance sheet of $12,517,297 and 11,638,921 as at June 30, 2009 and December 31, 2008, respectively. Pursuant to the surface mining operation sale detailed in note 2, approximately $5,849,000 of the Companys cash-collateralized reclamation bonds will be replaced by the purchaser. As a result, as at June 30,2009, the Company has classified $5,849,000 of the restricted cash and certificates of deposit as a current asset. The Company leases certain office space under a long-term operating lease running through 2009. Future non-cancelable minimum lease commitments under this lease as at June 30, 2009, payable in 2009, totaled $114,597. This lease is not related to the surface mining operations held for sale. |
PHOENIX COAL INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Three and Six Months Ended June 30,2009 and 2008 (Unaudited) A significant amount of the Companys surface and underground coal reserves are controlled through leasing arrangements and non-cancellable royalty lease agreements under which future minimum lease payments are due. In the ordinary course of business, the Company enters into contracts to purchase diesel fuel from local suppliers for physical delivery at specified prices. Pursuant to these contracts, the Company does not own a futures or options position in the purchased fuel. As at, and subsequent to, June 30, 2009, the Company has executed purchase contracts for a total of 2,562,000 gallons to be delivered in 2009 and 2010 at a total cost of $5,672,407, or an average weighted price of $2.21 per gallon. These fuel contracts are exclusively related to the surface mining operations held for sale. In 2007, the Company entered into a master coal purchase and sale agreement (the Master Agreement) to purchase coal fines recovered and processed by Covol Fuels No. 2, LLC (Covol) from two coal slurry reserve areas in Muhlenberg County, Kentucky. On July 6,2009 the Company executed an amendment to the Master Agreement (the Amended Master Agreement) revising the annual purchase and sale tonnage commitments. The term of the Amended Master Agreement runs through the exhaustion of the reserves (the Term). During the Term of the Amended Master Agreement, by July 1 of each year, the Company and Covol will agree to the annual tonnage commitment (the Commitment) that Covol will produce and that the Company will purchase for the next calendar year. For the calendar year 2010 the Commitment cannot be less than 360,000 tons and for subsequent years the Commitment cannot be less than 400,000 tons. The price to be paid by the Company for the coal fines is dependent on the price at which the fines are sold by the Company to its customer, but not less than $24.50 per ton. Additionally, the Company has the first right of refusal to purchase any tons produced by Covol in excess of the Commitment, but up to 720,000 tons annually. This Master Agreement is exclusively related to the surface mining operations held for sale. In June 2009, the Company entered into a coal supply agreement with an Illinois Basin producer to purchase 20,000 tons of coal per month from July 2009 through December 2009 at a purchase price of $39.00 per ton. Upon mutual agreement of the parties to the coal supply agreement, the term of the agreement may be extended to December 31, 2010. This coal supply agreement is exclusively related to the surface mining operations held for sale. As part of the Renfro Equipment Inc. acquisition in July 2008, the Company agreed that if, by July 31, 2010, it acquires at least 1.5 million reserve tons as defined by National Instrument 43-101 (NI43-101) due to the direct efforts of the sellers (Additional Reserves), the Company will pay the sellers $1,000,000 for the first 1.5 million tons of reserves, plus $0.50 per ton for each reserve ton in excess of 1.5 million. The acquisition closing documents define a specific territory from which the Additional Reserves can be acquired. The acquisition of the Additional Reserves must be on terms and conditions acceptable to the Company in its sole, reasonable discretion. As at June 30, 2009, the sellers had provided several mineral leases to the Company. However, the analysis and drilling that is required to qualify these properties as reserve tons under the definition of NI 43-101 is in its early stages. Therefore, it is not yet probable that the sellers will deliver 1.5 million reserve tons to the Company, so no liability has been currently accrued on the consolidated balance sheet to the sellers. This commitment is exclusiv ely related to the surface mining operations held for sale. NOTE 9 STOCK INCENTIVE PLAN AND WARRANTS 2007 Stock Option Plan ofMCC MCC adopted an incentive stock option plan in May 2007 (the 2007 Plan) which provides that the board of directors of the Company may from time to time, in its discretion, and in accordance with TSX requirements, grant to directors, officers, employees and technical consultants to the Company, non-transferable options to purchase common shares, provided that the number of common shares reserved for issuance will not exceed 10% of the issued and outstanding common shares. Such options will be exercisable for a period of up to 5 years from the date of grant. Vesting terms will be determined at the time of grant by the board of directors. In 2007, upon closing of an initial public offering, MCC granted to its directors and officers options to acquire 150,000 shares at a price of Cdn$0.25 per share, exercisable for a period of five years from August 28,2007. The 2007 Plan remains in force and options issued prior to the RTO will continue to be governed by the 2007 Plan; however due to the approval of the 2008 Plan (defined below), no further options will be issued pursuant to die 2007 Plan. |
PHOENIX COAL INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Three and Six Months Ended June 30,2009 and 2008 (Unaudited) 2008 Stock Option Plan of the Company In connection with completion of the RTO, the Company adopted a new stock option plan (the 2008 Plan) on May 20, 2008, which was effective upon the closing of the RTO. The 2008 Plan is designed to advance the interests of the Company by encouraging employees, officers, directors and consultants to have equity participation in the Company through the acquisition of common shares. The current intention is to use the 2008 Plan for option grants to employees, officers, directors and consultants of the Company. Options granted under the 2008 Plan may be incentive stock options or non-qualified stock options. The 2008 Plan was approved by the shareholders of the Company in June 2008 and 13,500,000 common shares are reserved for issuance under the 2008 Plan. The exercise price per common share is not to be less than the market price of the common shares at the time of the grant. The exercise period for each stock option is not to be more than ten years (five years in the case of an incentive stock option granted to a person who owns more than 10% of the issued and outstanding common shares). Options may be granted subject to vesting requirements. Unless terminated earlier by the board of directors, the 2008 Plan will remain in effect until all options granted under the 2008 Plan have been exercised or forfeited, or have expired. However, no new options may be granted under the 2008 Plan more than 10 years from the date the Plan was originally adopted by the board of directors. Phoenix had a stock incentive plan authorized by its board of directors in 2004 (the 2004 Plan) to grant options to its employees (including officers), directors and consultants. Pursuant to the 2004 Plan, Phoenix could issue non-statutory options and incentive stock options to purchase common shares of Phoenix as well as stock purchase rights. Stock options granted under the 2004 Plan were generally subject to vesting provisions of 25% at the end-of-year one from the date of grant and then evenly over the following 48 months. The options were granted at a price equal to 100% of the fan-value of the Companys common shares on the date of grant and have a ten-year term. Upon completion of the RTO, each Phoenix stock option was cancelled and extinguished and the holder received a replacement option of the Company to purchase that number of common shares of the Company equal to the number of shares of Phoenix common shares issuable under the Phoenix option with no change in the exercise price of such options due to the nature of the exchange rate between United States dollars and Canadian dollars. These replacement options are governed by the terms of the 2008 Plan. |
PHOENIX COAL INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Three and Six Months Ended June 30,2009 and 2008 (Unaudited) Information regarding stock option activity under the Plans follows: 2007 MCC Plan and 2008 Company Plan 2009 Activity Number of Weighted Average Options Denominated in Canadian Dollars Options Exercise Price Balance, December 31,2008 4,410,830 CdnS0.83 Granted 6,500,000 Cdn0.30 Voluntarily surrendered and cancelled (900,000) Cdn 1.75 Cancelled (25,000) Cdn 1.75 Cancelled and replaced (337,000) Cdn 1.75 Replacement options, including 208,000 previously issued in U.S. dollars 545,000 Cdn 0.30 Forfeited (535,000) Cdn 1.75 Options outstanding as at June 30,2009 9,658,830 CdnS0.27 Options exercisable as at June 30,2009 3,253,641 Cdn$0.27 Options Denominated in U.S. Dollars (2004 Plan Options Replaced with Number of Weighted Average 2008 Plan Options) Options Exercise Price Balance, December 31,2008 5,311,000 $0.98 Voluntarily surrendered and cancelled (3,300,000) 1.25 Cancelled and replaced (in Canadian dollars) (208,000) 1.25 Forfeited (403,000) 0.96 Options outstanding as at June 30,2009 1,400,000 S0.32 Options exercisable as at June 30,2009 1,176,892 $0.31 2008 Activity Number of Weighted Average Options Denominated in Canadian Dollars Options Exercise Price Balance, December 31,2007 150,000 Cdn$0.25 Consolidated at 1:2.35, pursuant to RTO (86,170) Balance after consolidation 63,830 Cdn 0.59 Granted 9,397,000 Cdn 1.32 Voluntarily surrendered and cancelled (5,050,000) Cdn 1.75 Options outstanding as at December 31,2008 4,410,830 CdnS0.83 Options exercisable as at December 31,2008 1,498,340 Cdn$0.82, Options Denominated in U.S. Dollars (2004 Plan Options Replaced with Number of Weighted Average 2008 Plan Options) Options Exercise Price Balance, December 31,2007 6,749,000 $0.87 Granted 1,000 1.25 Exercised (25,438) 0.25 Forfeited (1,413,562) 0.43 Options outstanding as at December 31,2008 5,311,000 $0.98 Options exercisable as at December 31,2008 2,986,495 S0.89 |
PHOENIX COAL INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Three and Six Months Ended June 30,2009 and 2008 (Unaudited) Compensation cost of stock option grants is recognized straight-line over the options vesting periods. Compensation expense related to stock options for the six months ended June 30, 2009 and 2008 was $1,865,000 and $2^291,277, respectively. In March 2009, certain officers of the Company voluntarily surrendered, and the board of directors concurrently cancelled, 4,200,000 options that had been previously issued to them, of which 2,075,849 were fully vested at the surrender date. The voluntary surrender was not accompanied by a concurrent grant of a replacement award or other consideration to these officers. This surrender caused an acceleration of the related compensation costs under CICA Handbook Section 3870. Had these officers not voluntarily surrendered these options, the related compensation expense for the six months ended June 30,2009 would have decreased by approximately $1,295,000. Additionally, in March 2009, the board of directors cancelled and replaced 545,000 stock options that had been previously issued to various production and administrative personnel. These options had originally been granted in 2007 and 2008, with vesting periods ranging from 3 years to 5 years, and exercise prices ranging from $1.25 to Cdn$1.75. The replacement options have a 3 year vesting period and an exercise price of Cdn$0.30. Under the terms of the 2008 Plan, the sale of the surface mining assets and associated liabilities described in note 2 could, depending on the final valuation of the sale, cause all options outstanding under the 2008 Plan to become fully vested and result in any unrecognized compensation expense to be charged to the statement of operations on the date of sale. As at June 30,2009 the unrecognized expense related to these options totaled approximately $720,000. The options* fair value was determined using the Black-Scholes option-pricing model. Expected volatilities are based on comparable company historical share price movement and other factors. The cost relating to the stock-based compensation plans is included in general and administrative expenses in the accompanying consolidated statements of operations. As at June 30,2009, the following stock options were outstanding: Number of Options Exercise Price Expiration Date 585,000 $0.25 April 2015 465,000 0.25 December 2015 335,000 0.50 May 2016 15,000 1.25 March 2017 63,830 Cdn0.59 August 2012 2,550,000 Cdn0.18 November 2018 6,345,000 Cdn 0.30 March 2019 700.000 Cdn 0.30 May 2019 11.058.830 Phoenix Warrants As part of the fee structure related to Phoenixs preferred share offering in August 2007, the underwriter received warrants to purchase 1,780,000 shares of the preferred shares of Phoenix at $1.25 per share. The warrants expire 24 months following the date Phoenix consummates an initial public offering of its common shares. The warrants total value of $462,800 was determined using the Black-Scholes option pricing model. Assumptions used in the model were a risk free interest rate of 4.76%, dividend yield of 6.50%, and expected volatility of .40. The value of the warrants was charged to share capital. On June 27,2008, under the terms of a broker agreement, the warrants were converted to warrants to purchase common shares of the Company at $1.25 per common share and expire in June 2010. Company Warrants Under the terms of the Offering, 31,428,580 warrants were issued to the purchasers of the common shares offered. The warrants entitle the holder to purchase one common share for each warrant held at a price of Cdn$2.25 per share. The warrants expire in June 2010. The warrants total value of $8,077,145 was determined by the underwriter of the Offering. The value of the warrants was charged to share capital. |
PHOENIX COAL INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Three and Six Months Ended June 30,2009 and 2008 (Unaudited) Information regarding the warrant activity follows: Weighted Number of Average Exercise Phoenix Warrants Warrants Price Balance, December 31,2007 $ Converted preferred warrants to common warrants 1,780,000 1.25 Warrants outstanding and exercisable as at June 30, 2009 and December 31, 2008 1,780,000 $1.25 Weighted Warrants Denominated in Canadian Dollars Number of Average Exercise Company Warrants Warrants Price Balance, December 31,2007 100,000 CdnS0.25 Consolidated at 1:2.35, pursuant to RTO (57,447) Balance alter consolidation 42,553 Cdn 0.59 Exercised (11,850) Cdn 0.59 Warrants issued with new common shares 31,428,580 cdn 2.25 Warrants outstanding and exercisable as at June 30,2009 and December 31, 2008 31,459,283 CdnS2.25 As at June 30,2009 the following warrants were outstanding: Number of Warrants Exercise Price Expiration Date 1,780,000 $1.25 June 2010 30,703 Cdn 0.59 September 2009 31.428.580 Cdn 2.25 June 2010 33.239.283 Total cash received from options and warrants exercised during the six months ended June 30, 2009 and the year ended December 31, 2008 totaled nil and $12,838, respectively. Broker Options Under the terms of the Offering, the agents received Brokers Options entitling the agents to purchase in the aggregate 2,514,286 Brokers Units. Each Broker Unit entitles the agent to purchase one common share for Cdn$1.75 per share and one half warrant entitling the agent to purchase one additional common share for each full warrant at Cdn$2.25 per share. The Brokers Options expire in June 2010 and are all exercisable at June 30,2009. The options total value of $1,106,286 was determined using the Black-Scholes option pricing model. Assumptions used in the model were a risk free interest rate of 3.99%, no dividend yield, and expected volatility of .40. The value of the options was charged to share capital as a cost of the Offering. NOTE 10 SALES CONTRACT TERMINATION On March 3, 2009, the Company entered into a mutual release and settlement agreement with one of its customers to terminate a coal supply agreement for delivery of coal in 2009 and 2010 (the 2009/2010 Supply Agreement). In consideration for terminating the 2009/2010 Supply Agreement, the Company paid the customer $3,000,000 in cash. The payment relieved the Company of the obligation to deliver approximately 970,000 tons of coal, 470,000 in 2009 and 500,000 in 2010. In addition, the Company agreed to make up in 2009 approximately 170,000 tons of shipments that were not delivered in 2008 under a separate coal supply agreement dated January 1,2008 (the 2008 Supply Agreement). In return for fulfilling the 2008 Supply Agreement, the customer agreed to change die guaranteed monthly average BTU specification from 11,500 to 11,200. The $3,000,000 payment has been charged to die consolidated statement of operations. |
PHOENIX COAL INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Three and Six Months Ended June 30,2009 and 2008 (Unaudited) NOTE 11 RELATED PARTY TRANSACTIONS The Company enters into transactions with shareholders and/or affiliated entities that have some level of common ownership with the Company. A summary of the related party transactions and balances follows for the six months ended June 30, 2009 and 2008: Six Months Ended 2009 1008 Expenses: Consulting fees $ $156,000 Rent and miscellaneous 32,925 Accounts receivable 16,858 Accounts payable 3,741 The above expense amounts were paid to MHI Energy Partners, LLC, which amounts were applied towards, among other things, salaries, overhead and benefits for individuals who provided services. These transactions are also in the normal course of business, and are recorded at the consideration established and agreed to by the related parties. David Wiley and Timothy Fogarty were managing directors of MHI Energy Partners, LLC. David Wiley is currently an officer and director of the Company and Phoenix, and Tim Fogarty resigned as a director of Phoenix in September 2008. During the second quarter of 2008, the Company discontinued these payments to MHI. NOTE 12 SUBSEQUENT EVENTS On July 28,2009, the Company executed an amendment to a coal sales contract with one of its customers. Under the original terms of the contract, shipments to this customer were for 11,500 BTU quality coal and scheduled to be completed by December 31, 2009. The amendment terms extend the period of time to fulfill the contracted tonnage shipments to December 31,2012 and decrease the minimum BTU guarantee to 11,400 BTU for coal shipped in 2009 and 2010. |
PHOENIX COAL INC. Managements Discussion and Analysis For the three and six months ended June 30,2009 |
Phoenix Coal Inc. Managements Discussion and Analysis Three and Six Months Ended June 30,2009 The following discussion of the results of operations, financial condition and cash flows of Phoenix Coal Inc. (the Company) prepared as at August 14, 2009 should be read in conjunction with the Companys unaudited interim financial statements for the three and six months ended June 30,2009 and its 2008 audited financial statements and the notes thereto. These financial statements, which were prepared in accordance with generally accepted accounting principles in Canada, are available at www.sedar.com. All amounts disclosed are in United States dollars unless otherwise stated. This Management Discussion and Analysis contains forward-looking statements which may include, but are not limited to, statements with respect to the future financial or operating performance of the Company and its projects, the future price of coal, the estimation of mineral resources, the timing and amount of estimated future production, costs of production, capital, operating and exploration expenditures, costs and timing of the development of new deposits, costs and timing of future exploration, requirements for additional capital, government regulation of mining operations, environmental risks, reclamation expenses, title disputes or claims, limitations of insurance coverage and the timing and possible outcome of regulatory matters. Often, but not always, forward-looking statements can be identified by the use of words such as plans, expects, is expected, budget, scheduled, estimates, forecasts, intends, anticipates, or believes or variations (including negative variations) of such words and phrases, or statements that certain actions, events or results may, could, would, might or will be taken, occur or be achieved. Forward-looking statements are based on the reasonable assumptions, estimates, analysis and opinions of management made in light of its experience and perception of trends, current conditions and expected developments, as well as other factors that management believes to be relevant and reasonable at the date that such statements are made. Forward-looking statements involve known and unknown risks, uncertainties, assumptions and other factors that may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Such factors include, but are not limited to, the factors discussed in the section entitled Risk Factors in the prospectus of the Company available on SEDAR at www.sedar.com. Although the Company has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking statements, there may be other factors that cause actions, events or results to differ from those anticipated, estimated or intended. Forward-looking statements contained herein are made as at the date of this management discussion and analysis. There can be no assurance mat forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements. The Company does not undertake to update any forward-looking statements except as required by applicable securities laws. Overview The Company is headquartered in Madisonville, Kentucky and is engaged in the exploration, production, acquisition and sale of coal from the Illinois Basin. The primary customers of the Company are electric utility companies. The current mining operations and nea r-term development projects of the Company are located in Western Kentucky, an area that comprises a part of the Illinois Basin. As at June 30, 2009, the Company operated five surface mines -Briar Hill/Radio Hill (two mines at one geographic location), Back in Black, KO, and Jessup. As further discussed, subsequent to the end of the second quarter 2009, the Company entered into a definitive agreement to sell substantially all of the assets associated with its surface mining operations. |
Phoenix Coal Inc. Managements Discussion and Analysis Three and Six Months Ended June 30,2009 Highlights for the first six months of 2009 During the three and six months ended June 30,2009: Subsequent to the end of the second quarter 2009, the Company entered into a definitive agreement to sell substantially all of its surface coal mining assets to a significant privately-owned, Ohio-based coal producer on terms and conditions detailed in the in the Sale of Surface Mining Assets section below. The Company received the required permitting from the Kentucky Department of Natural Resources and the U.S. Army Corps of Engineers for its Winn North, Radio Hill and KO reserves. After receiving all requisite permits, the Company began mining its Radio Hill reserve in January; re-opened the Winn North reserve, part of the Back in Black mine, in February after being idled for eight months; and commenced mining the KO reserve in May. On January 26,2009, a devastating ice storm hit Western Kentucky, destroying electrical infrastructure and seriously crippling the area. Consequently, the Company was unable to produce coal for approximately a week because of the loss of power and inability to access its mine sites. The Company estimated it lost approximately 50,000 to 60,000 tons of production due to the ice storm. Heavy rainfall during the second quarter 2009 hampered production at most mine locations. April rainfall was 34% higher than average for the month, while May was 29% higher than average, according to data published by the National Oceanic and Atmospheric Administration. On March 3, 2009, the Company entered into a mutual release and settlement agreement with one of its customers to terminate a coal supply agreement for delivery of coal in 2009 and 2010 (the 2009/2010 Supply Agreement). In consideration for terminating the 2009/2010 Supply Agreement, the Company paid the customer $3,000,000 in cash. In addition, the Company agreed to make up in 2009 approximately 170,000 tons of shipments that were not delivered in 2008 under a separate coal supply agreement dated January 1,2008. On March 27,2009, the Company announced it had entered into a sublease agreement with Petersburg Coal, LLC (Petersburg). The subleased mineral reserves are contiguous to the Companys Gryphon Mining Complex, formerly known as the Pratt Mine. On May 12, 2009, the Company announced it had completed its National Instrument 43-101 technical report on the Gryphon Mining Complex. Based on the report, at the Gryphon Mining Complex the Company controls 68.4 million tons of proven and probable coal mineral reserves, 3.7 million tons of underground measured and indicated coal resources, and 0.2 million tons of inferred coal resources. During the second quarter of 2009, the Company produced approximately 450,000 tons of saleable coal and purchased nearly 83,000 tons of saleable coal. For the six months ended June 30,2009, the Company produced approximately 943,000 tons of saleable coal and purchased nearly 136,000 tons of saleable coal. Coal sales totaled approximately 522,000 tons and 1,060,000 tons for the quarter and six months ended June 30,2009, respectively. Revenue for the three months ended June 30, 2009 was approximately $17,320,000 for an average revenue per ton sold of $33.20. Revenue for the six months ended June 30,2009 was approximately $35,292,000 for an average revenue per ton sold of $33.30. Cost of sales for the three months ended June 30,2009 was approximately $17,020,000 for an average cost per ton sold of $32.62. Cost of sales for the six months ended June 30,2009 was approximately $31,763,000 for an average cost per ton sold of $29.97. |
Phoenix Coal Inc. Managements Discussion and Analysis Three and Six Months Ended June 30,2009 For the three and six months ended June 30, 2009, the Companys net loss was approximately $44,801,000 and $52,436,000, respectively. These amounts include the write down of assets held for sale of $38,920,000 described in the Sale of Surface Mining Assets section below. Capital expenditures for the six months ended June 30, 2009 were $7,673,000, which included $5,821,000 of new equipment that was financed through term loans. At June 30, 2009, the Company had approximately $20,774,000 in cash, cash equivalents and short-term investments. Results of Operations Sale of Surface Mining Assets Subsequent to the end of the second quarter 2009, the Company entered into a definitive agreement with a privately owned coal producer to sell substantially all of the operating assets and operations, including coal reserves, mining property, plant and equipment, mining rights, coal purchase contracts and coal sales contracts associated with its surface coal mining operations in Western Kentucky. The consideration which will be received upon closing includes $5.7 million in cash, assumption by the purchaser of all debt associated with the equipment being sold and the assumption of certain reclamation liabilities related to the coal reserves. In addition, the purchaser will replace the Companys letters of credit for assumed reclamation obligations, which, upon transfer of the active mining permits, will release the restrictions on approximately $5.8 million of restricted cash and certificates of deposit The Company can potentially receive an additional $1.0 million, upon satisfaction of certain post-closing obligations. The closing of the transaction is subject to certain closing conditions, including closing conditions related to satisfying the purchaser as to the size and quality of the coal reserves. Effective June 30, 2009, the property, plant and equipment, mining rights, mine development costs and mineral reserves being sold have been written down to the amount expected to be realized on sale, namely the cash to be received plus the amount of the liabilities being assumed by the purchaser on closing, less costs to sell. This resulted in a write down of assets held for sale in the amount of $38,920,000 in the three months ended June 30, 2009. Production On January 26, 2009, a devastating ice storm hit Western Kentucky, destroying electrical infrastructure and seriously crippling the area. Consequently, the Company lost approximately 50,000 to 60,000 tons of production because of the loss of power and inability to access its mine sites. Heavy rainfall during the second quarter 2009 delayed mining as water had to be pumped from the coal pits. April rainfall was 34% higher than average for the month, and May was 29% higher according to data published by the National Oceanic and Atmospheric Administration. For the first half of 2009, production from Phoenixs owned mines came from six sources Briar Hill, Radio Hill, Back in Black, KO, Jessup, and Beech Creek. The closing of the Beech Creek mine and subsequent opening of the KO mine negatively impacted production as a mine at full production was replaced by a mine in its early stages of production during the second quarter 2009. In addition, Back in Black encountered productivity problems due to old works and short pit length. The Graham #5 and Stony Point mines (producing a combined 169,550 tons for the quarter ended June 30,2008) were depleted during 2008 while Beech Creek mined out in April 2009 after producing 24,393 tons and 134,094 tons for the second quarter and the six months ended June 30,2009, respectively. |
Phoenix Coal Inc. Managements Discussion and Analysis Three and Six Months Ended June 30,2009 The following table summarizes the production from Phoenixs owned mines during the quarter and six months ended June 30,2009 versus comparable time periods in the prior year. Q2.Q2 % YTD 6/30 YTD 6/30% 2009 2008 Variance Variance 2009 2008 Variance Variance Briar Hill/Radio Hill 296,154 236,586 59,568 25.2% 587,260 474,722 112,538 23.7% Back in Black 42,583 65,605 (23,022) -35.1% 72,590 127,637 (55,047) -43.1% KO 25,162 25,162 0.0% 25,162 25,162 0.1% Jessup 852 T7J6.0%jj 123,568;T j.23J568 JL0% BejschOreekjjjjjjT Sub^taFZ 450,144 302,19lTi 147,953 j j 49.0%g S 942,674;; 602,359 ji 340315 jf 56.5% J. Othermines Z. 55oZ (169,550)I00.0%; 2ZZZZ . 37l.804_;: (,371,804)1 Total T 450,144 471,741 (21,597)11 -4.6%j j 942,674 ;; 974,163 (31,489)0 -3.2% Briar Hill/Radio Hill continued to lead production during the second quarter 2009. These two mines produced a total of 296,154 tons for the quarter ended June 30,2009, a 59,568 ton increase over the 236,586 tons produced for the quarter ended June 30,2008. Production at this location increased 25% and 24% for the quarter and six months ended June 30, 2009, respectively. Water inflow from portions of Radio Hills overburden decreased during the quarter, contributing to the production increase at this location. The Back in Black mine produced 42,583 tons in the quarter ended June 30, 2009, a decrease of 23,022 tons from 65,605 produced tons for the similar period in 2008. The mine had been idled for eight months after it had mined through its permit area in June 2008 and resumed production in February 2009. In the second quarter 2009, Back in Black encountered old works in the west end of its pit creating a shorter, less productive pit length. These conditions, coupled with permit boundary restrictions, constrained the space available for overburden removal. As a result, additional trucks and manpower were deployed to haul spoil to an old pit to provide relief, generating increases in diesel fuel consumption and labor hours. In July 2009, manpower was redeployed to another section of the mine with lower stripping ratios, in an effort to increase production at this location. KO mine was originally scheduled to begin production in March 2009, but was delayed until late May due to permit issues. As production began, mining was slow as a mud slip and an eighteen inch parting were encountered limiting production to 25,162 tons in the quarter ended June 30,2009. The mud slip is no longer present and coal quality is improving as the parting in the seam is drier and more friable, creating less contamination as the coal is mined. The Jessup mine had its highest productivity month, producing 21,882 tons in May 2009 and 61,852 tons for the quarter ended June 30,2009, making Jessup the second highest producing mine for the second quarter 2009. Purchased Coal First quarter 2008 was Covols first full quarter of operation after acquiring the Rock Crusher preparation plant and slurry reserves from the Company at the end of November 2007. Production was slow to start due to inclement weather, start-up issues and downtime related to initial capital improvements. During the second quarter 2008, production increased to nearly 10,000 tons per month. By the end of 2008, Covol had finished construction on its new preparation plant and modifications on the Rock Crusher plant setting me stage for higher production in 2009. Consequently, Covol continued to improve production and quality during the first half 2009 with the second quarter being the most productive quarter since the commencement of operations. |
Phoenix Coal Inc. Managements Discussion and Analysis Three and Six Months Ended June 30,2009 Prior to the acquisition of C&R at the end of July 2008, the Company managed the Beech Creek property on behalf of C&R and purchased the production from the mine. During the first quarter 2008, the Company developed the mine area for the Beech Creek South permit, which had limited production at the outset. However, after developing a longer, more efficient pit length and acquiring new equipment, the second quarter 2008 production improved to where the Company purchased over 140,000 tons from C&R. The following table summarizes the purchased coal, including C&R, during the second quarter and six months ended June 30,2009 versus similar periods in the prior year. Q2 Q2 YTD 6/30 YTD 6/30 2009 2008 Varianc 2009 2008 Variance Covol 82,878 29,269 53,609 135,843 36,776 99,067 C&R Coal 140,496 (140,496) 159,639 I (159,639) Totaf 82,878 l69,765 (86,887) 135,843 196,415 (60,572) In June 2009, the Company entered into a coal supply agreement with an Illinois Basin producer to purchase 20,000 tons of coal per month from July 2009 through December 2009 at a purchase price of $39.00 per ton. Upon mutual agreement of the parties to the coal supply agreement, the term of the agreement may be extended to December 31, 2010. This coal is a higher BTU product than the Company currently produces from its operations. Blending this coal with the Companys coal will reduce the amount of coal that the Company will have to wash from its own operations. Revenue The Company primarily derives its revenue from coal sales to electric utility companies. For the three months ended June 30, 2009, the Companys revenue decreased by 19% to $17,320,379 from $21,326,102 in the prior year comparative three month period. For the six months ended June 30, 2009, Phoenixs revenue decreased by 11% to $35,292,271 from $39,821,562 in the prior year six month period. For the three month periods ended June 30, tons sold decreased 19% from 646,000 tons in 2008 to 522,000 tons in 2009. For the six month periods ended June 30, sold tons decreased 12% from 1.2 million tons in 2008 to 1.1 million tons in 2009. The decrease in revenue was primarily attributable to a decrease in sales volume due to the year over year reductions in produced and purchased coal previously discussed. For the six months ended June 30,2009, average revenue per ton sold increased to $3330 from $33.02 in the same period in 2008. The increase of $0.28 per ton resulted from shipments on several sales contracts which transitioned to 2009 contract pricing after fulfilling 2008 contract commitments. Additionally, due to renegotiating a change in quality specifications with two customers, and deferring tons shipped to another customer with a higher quality requirement into 2010, the Company was able to ship a higher percentage of its sales on contracts which currently provide the highest base price realization of all its sales contracts. Conversely, due to the depletion of the Beech Creek mine, overall BTU quality decreased, reducing the revenue per ton realized by the Company on several of its sales contracts and thus offsetting any of the increase discussed above. Cost of Sales Cost of sales consists of all mining related expenses, preparation costs, transportation costs and purchased coal before depreciation and amortization. Diesel fuel had the largest cost decrease during the second quarter 2009 compared to the second quarter 2008. On a cost per ton produced basis, diesel fuel cost was $5.44 in the second quarter 2009 compared to $9.10 in the second quarter 2008, a $3.66 or 40% decrease. Fuel costs decreased from an average of $3.83 per gallon to an average of $2.02 per gallon in the quarter ended June 30,2008 versus 2009. Year |
Phoenix Coal Inc. Managements Discussion and Analysis Three and Sis Months Ended June 30,2009 over year, diesel fuel cost decreased $3,629,014 for the six months ended June 30, 2009 due primarily to a $1.38 decrease in the per gallon fuel cost from $3.39 in 2008 to $2.01 for the same period in 2009. Labor and benefits increased 20% from $3,854,407 in the second quarter 2008 to $4,643,217 in the second quarter 2009. Cost per ton produced increased from $8.17 in the second quarter 2008 to $10.31 in the second quarter 2009. Man hours worked increased for the quarter ended June 30,2009 primarily due to the excess rainfall and production delays at the KO and Back in Black mines previously discussed. Purchased coal, a variable cost, accounted for approximately 12% of the cost of sales in the second quarter 2009. For the quarter ended June 30,2009, purchased coal was $2,106,623 versus $5,346,762 for the same period in 2008. For the six monms ended June 30, 2009, purchased coal was $3,461,367 and $6,160,445 for the same period in 2008. Prior to its purchase of C&R in July 2008, Phoenix was purchasing coal from C&R, thus accounting for the significant cost differential year over year. The cost per ton purchased decreased from $31.49 for the second quarter ended June 30, 2008 to $25.41 in 2009. For the six months ended June 30, 2009, the cost per ton purchased decreased from S31.36 in 2008 to $25.48 in 2009 In 2009, Covol provided all purchased coal, which was less expensive than the coal purchased from C&R in 2008. Maintenance costs for the second quarter ended June 30,2009 were $2,894,435 and $1,926,971 for the same period in 2008, an increase of $967,464. Cost per ton produced was $6.43 for the second quarter ended June 30, 2009 and $4.08 for 2008, a 58% increase. Maintenance costs increased for the second quarter 2009 versus the second quarter 2008 due to shovel rebuild work performed that was not anticipated until 2010. Additionally, some older pieces of equipment utilized at Jessup required significant maintenance work during the second quarter 2009 as Jessup increased its production levels. Overall, the Companys cost of sales decreased by 20% to $17,019,692 in the second quarter 2009 from $21,199,549 in the similar period for 2008. Comparing the same periods on a cost per ton sold basis, cost of sales was $32.62 versus $32.80. For the six months ended June 30, 2009, cost of sales decreased from $38,684,869 in 2008 to $31,763,409 in 2009. Cost per ton sold for the six months ended June 30,2009 was $29.97 compared to $32.07 in 2008 for a decrease of 7%. Selling. General and Administrative CSG&A^ Expenses SG&A expenses primarily consist of royalty payments to surface and mineral owners, sales commissions, federal excise tax, severance tax, federal reclamation fee and corporate overhead costs in the Companys Madisonville and Louisville offices. For tie three months ended June 30, 2009, the Companys selling expenses were $1,852,362 versus $2,074,001 for the similar period in 2008. For the six months ended June 30, 2009, the Companys selling expenses were $4,008,043 versus $4,144,935 for the same period in 2008. The Companys selling costs (royalties and coal taxes described above) are variable with respect to coal sales and ranged from approximately 10% to 11% of coal sales for the above mentioned periods. General and administrative (G&A) costs in the second quarter 2009 were $2,004,939 compared to $3,813,178 during the similar period in 2008. The primary variance between the 2009 and 2008 quarters is a non-cash charge to employee share-based compensation, which was $6,000 in 2009 and $2,151,277 in 2008. Stock option forfeitures and a lower valuation of more recently issued options reduced share-based compensation expense in 2009, while the issuance of 6,847,000 options at a higher valuation significantly increased this expense in 2008. G&A costs for the six months ended June 30,2009 were $5,602,583 and $5,412,290 for the similar period in 2008. Depreciation and Amortization Depreciation and amortization expense for the three and six months ended June 30, 2009 was $1,907,711 and $3,731,492, respectively, compared to $2,043,344 and $3,107,176, respectively, for the similar periods in 2008. Depreciation expense for the first six months of 2009 increased $1,013,919 when compared to the same period in |
Phoenix Coal Inc. Managements Discussion and Analysis Three and Six Months Ended June 30,2009 2008. This increase in depreciation expense was primarily related to the significant investment in mining equipment in the fourth quarter 2007 and during the calendar year 2008. Interest Expense/Foreign Currency Adjustment Interest expense for the three and six months ended June 30, 2009 was comprised primarily of interest paid on equipment financing. For the three and six months ended June 30, 2008, interest expense included (1) interest on the Companys revolving line of credit, equipment financing, and short-term bridge financing and (2) non-cash costs which included accrued dividends on the preferred shares, accretion of the preferred share offering costs, accretion of loan costs on the short-term bridge financing, and mark to market on an interest rate swap. Interest expense for the three and six months ended June 30, 2009 was $424,723 and $784,625, respectively. Interest expense for the three and six months ended June 30,2008 was $2,765,589 and $5,124,968, respectively. Interest expense decreased year-over-year for both the quarter and year to date periods due primarily to the elimination of interest related costs on the preferred shares and the short-term bridge financing which were converted to common share equity in June 2008. The foreign currency loss of $103,710 for the three months ended June 30, 2008 and the foreign currency gain of $129,130 for the six months ended June 30, 2008 was related to mark to market adjustments for the short-term bridge financing which was denominated in Canadian dollars. This financing was converted to common share equity in June 2008. Interest Income Interest income for the three months ended June 30,2009 and 2008 was $21,789 and $14,060, respectively. For the six months ended June 30, 2009 interest income was $98,478, compared to $26,721 for the comparable period in 2008. The year over year increase in interest income for both the quarter and six month periods was due to higher balances of cash and short-term investments as a result of the capital raised from the prospectus offering in June 2008. Interest income decreased in the first two quarters of 2009, compared to the third and fourth quarters of 2008 primarily due to historically low interest rates on United States Treasury bills, which is the primary investment vehicle utilized by the Company. Other Expense For the six months ended June 30,2008, the Company realized a loss on the sale of assets in the amount of $214,057 versus a loss of $1,730 for the comparable period in 2009. In 2008, the Company disposed of non-core property and equipment |
Phoenix Coal Inc. Managements Discussion and Analysis Three and Six Months Ended June 30,2009 Summary of Quarterly Results I 2009 II 2008 II 2007 (figures in thousands except per unit data) Q209 QX 09 Q408 Q3 Q8 Q2 08 Ql 08 Q4 01 Q3 07 Saleable coal production 450 493 527 431 472 502 547 S84 Purchased coal (1) 83 53 18 109 170 27 Tons sold 522 538 568 52!? 646 560 539 562 Average revenue per ton $33,20 $33.40 $33.11 S 34.20 $33,00 $33.03 $ 31.19 $31.62 Average cost of sales per ton $32.62 $27.40 S 26.90 S 33.87 $ 32.80 S 31.23 S 34.40 $27.21 Revenue $17,320 $17,972 S 18,809 $18,094 $21,326 S 18,495 S 16,830 $17,764 Cost of sales 17,020 14,744 15,278 17,919 21,200 17,485 18,562 15,287 Selling expenses 1,852 2,156 2,286 1,757 2,074 2,071 2,175 2,229 General and administrative 2,005 3,598 5,593 2,541 3,813 1,599 3,118 1,206 Depreciation and amortization 1,908 1,824 3,084 2,221 2,043 1,064 1,023 837 Write down of assets held for sale 38,920 - - - Sales contract termination cost 3,000 - - - Asset impairment write down . 2,873 Loss from operations $(44,385) S (7,350) $ (7,432) $ (6.344) (7,804) $(3,724) $ (10,921) $(1,795) Other expense, net 406 285 578 320 2,893 2,292 4,859 3,875 Income taxes J0 38 (1) 76 (7) Net loss for the period $ (44,80T) $(7.635) $ (8,048) $ (6,664) $(10,696) $ (6,016) $ (15,856) $ (5,663) Basic and diluted net loss per share $ (0.30) $ (0.05)[| $ (0.05) $ (0.04)1 (0-25)| $ (0.16)|| $ (0.43) $ (0.15) |(i) The Company purchased coal from Covol Engineered Fuels (Covol) and C&R Beech Creek, a mine which it managed fom September 2007 Through before the Company acquired C&R. Production During 2008, the Company operated the Briar Hill, Graham #5, Stony Point, Back in Black, Beech Creek and Jessup mines. The Stony Point mine effectively depleted at the end of February 2008, only producing approximately 24,500 tons from March through July 2008 while completing a required fece-up project for the lessor of the property. As at the beginning of June 2008, the Company had mined through its Back in Black mine permit area, and production at Back in Black was idled until the Company received the requisite permits for the adjacent property in the first quarter 2009. The equipment and manpower had been moved to Beech Creek to maintain similar Company-wide production levels. At the end of July 2008, the Company closed the acquisitions of C&R and Renfro, which added the Beech Creek and Jessup mines to the Companys owned portfolio. The third quarter 2008 results were negatively impacted by a two-week vacation shutdown taken in August. Typically, vacation is scheduled for the end of June and the beginning of July, thus spreading the effect over the second and third quarters, not just one quarter. Fourth quarter production was negatively affected by depletion at Graham #5, which depleted in December, and Beech Creek which experienced declining production as it neared the end of its reserve life. These 2008 production losses were somewhat offset by Jessup, which produced nearly 43,000 tons in the fourth quarter 2008 as opposed to approximately 19,000 tons in the third quarter 2008. Please see the Results of Operations section for detail on 2009 production. |
Phoenix Coal Inc. Managements Discussion and Analysis Three and Six Months Ended June 30,2009 The following table summarizes the quarterly saleable production results for the trailing five quarters: Q2 08 Q308 Q408 Q109 Q209? Briar Hill/Radio Hill 236,586 l82,438 256,188 291,106 296,154 Ghraham_#5 154,986 108,251 83,614 - Back in Black 65,605 - 30,007 42,583 ko - 25,162 Stony Point Stony Point 14,564 9,971 - Jessup - 18,742 42,495 61,716 61,852 Beech Creek 111,465 145,053 109,701 24,393 Total production 471,741 430,867 527,350 492,530 450,144 Purchased Coal Prior to the acquisition of C&R at the end of July 2008, the Company managed the Beech Creek property on behalf of C&R and purchased the production from the mine. The declining trend in purchased coal from C&R from the second quarter 2008 to the third quarter 2008 is due to the acquisition and accounting for the tonnage from August and September as production and no longer as purchased coal. Since the first quarter 2008, the Company has been purchasing coal fines from Covol, whose production has trended upward through the second quarter 2009. The Company only purchased approximately 18,000 tons of coal fines in the fourth quarter 2008 because Covol was not able to meet quality specifications, which has been corrected in 2009. Due to a shortfall in its 2008 commitment to the Company, Covol agreed to make up 124,624 tons of coal that were not delivered in 2008 (the 2008 make-up tons) beginning on April 1, 2009. The Company will pay a reduced price of $24.00 per ton instead of $25.50 per ton, until the 2008 make-up tons are completely delivered. Covol had supplied approximately 70% of its 2008 make up tons by June 30,2009. The following table summarizes the quarterly production and purchased coal for the trailing five quarters, illustrating the transition of Beech Creek from purchased coal to owned production. Q208 Q308 Q408 Ql09 Q209 Company production (excl Beech Creek) 471,741 319,402 382,297 382,829 425,751 Beech Creek (Owned) l11,465 145,053 109,701 24,393 Sub-total Company production 471,741 430,867 527,350 492,530 450,144 C&R-Beech Creek 140,496 64,803 - Covol (purchased coal) 29,269 44,190 17,558 52,965 82,878 Sub-total purchased coal 169,765 108,993 17,558 52,965 82,878 TotaiTources of roduction 641,506 539,860 544,908 545,495 533,022 |
Phoenix Coal Inc. Managements Discussion and Analysis Three and Six Months Ended June 30,2009 Revenue Revenue per ton sold growth in 2008 was due to contractual price increases on existing contracts and servicing new contracts with higher negotiated sales prices. The incremental revenue per ton sold realized in the third quarter 2008 was due to additional transportation and loading fees paid to the Company to ship coal to customers from alternate dock facilities during the Green River lock maintenance shutdown, which occurred in August and September. For the first three months of 2009, average revenue per ton sold increased to S33.40 from $33.11 in the fourth quarter of 2008. The increase of $0.29 per ton resulted from shipments on several sales contracts which transitioned to 2009 contract pricing after fulfilling 2008 contract commitments during the first quarter of 2009. Revenue declined in the second quarter 2009 to $33.20 per ton sold from the first quarter 2009 level of $33.40 per ton sold due to diesel fuel and BTU quality adjustments. During the first quarter 2009, on one of its customer contracts, the Company was compensated at a higher diesel fuel reimbursement rate while it was completing its 2008 contract obligations. As the 2008 contract obligations were fulfilled, the diesel fuel reimbursement was recalculated using 2009 diesel fuel pricing, creating a reduction in the diesel fuel reimbursement Additionally, due to the depletion of me Beech Creek mine, overall BTU quality decreased for the quarter, reducing the per ton revenue realization on several of the Companys contracts. Cost of Sales The trend in cost of sales has primarily been impacted by maintenance costs and commodity costs. Since the beginning of the fourth quarter 2007, the Company has spent approximately $33,400,000 on new production equipment, which has increased productivity and lowered maintenance costs through the first quarter 2009. Rising commodity costs had a significant impact on the Companys diesel fuel and explosives costs through the first three quarters of 2008. After the severe sell-off in commodities during the latter part of 2008, diesel fuel cost per gallon and ammonium nitrate fuel oil (ANFO) cost per hundred-weight trended downward through the first quarter of 2009. Diesel fuel and explosives, on a cost per ton produced basis, increased from the first quarter 2009 to the second quarter 2009 primarily due to the additional spoil hauling at the Back in Black mine and challenging mining conditions at the KO location. Additionally, the Jessup mine had to employ a restricted blasting pattern as it neared its permit line, thereby increasing its overall explosives cost. The following table summarizes the trend in diesel and ANFO/explosives costs through the second quarter 2009. Cost per ton produced Q2 08 Q308 Q408 Q1;09 Q209 Diesel fuel $9.10 $8.38 $5.10 $4.39 $5.44 ANFO/Explosives 3.16 2.92 2.43 2.28 3.05 Total $ 12.26 $11.30 $7.53 $6.67 $8.49 Selling. General and Administrative Expenses During 2008, selling expenses, which include coal taxes and royalties, ranged from approximately 10% to 12% of coal sales. The Company does not pay coal taxes or royalties on purchased coal so selling expenses declined as a percentage of coal sales to approximately 10% during the second and third quarters of 2008 when purchased coal was at its highest for the year. During the third quarter, the Company started paying a $0.60 per ton sold overriding |
Phoenix Coal Inc. Managements Discussion and Analysis Three and Six Months Ended June 30,2009 royalty to the owners of C&R as part of the acquisition agreement For the fourth quarter of 2008, selling expenses reached 12% of coal sales as approximately 97% of sales were sourced from the Companys production and it was the first full quarter for paying the overriding royalty to C&R. For the six months ended June 30, 2009, selling expenses -were 11% of coal sales. The C&R overriding royalty of $0.60 per ton ceased in April 2009, as Beech Creek was depleted. General and administrative expenses have risen as the Company has hired more employees to fill various roles at the middle and senior management levels. The spike in G&A in the second quarter 2008 was because of a non-cash share-based compensation charge related to stock option issuances of $2,151,277. During the fourth quarter of 2008 and the first quarter of 2009, the Company cancelled certain stock options that the Board of Directors and several officers voluntarily surrendered. This action accelerated the non-cash stock option expense related to these options and increased compensation expense by approximately $2,250,000 for the fourth quarter 2008 and $1,441,000 for the first quarter 2009. Liquidity and Capital Resources As at June 30,2009, the Company had $20,773,655 in cash, cash equivalents and short-term investments, compared to $40,626,316 as at December 31,2008. The Company also had restricted cash, cash equivalents and certificates of deposit as collateral for letters of credit for reclamation bonding in the amount of $12,517,297 as at June 30, 2009 versus $11,638,921 as at December 31,2008. The Companys primary sources of cash include sales of coal production to customers, sales of non-core assets and financing transactions. The Companys primary uses of cash include cash costs of coal production, capital expenditures, costs for development projects, debt service costs and costs related to reclamation obligations. The Companys ability to continue to grow its business is dependent on its ability to continue to generate cash from its primary sources in excess of its primary uses. Operating Activities Cash used by operating activities for the three and six months ended June 30, 2009 was $3,003,436 and $7,659,492, respectively. The Companys operating loss was the primary reason for the use of cash, which, for the six months ended June 30,2009, included the $3,000,000 payment to terminate a coal sales contract with one of its customers. Changes in non-cash operating assets and liabilities provided $888,388 of cash for the quarter ended June 30,2009, primarily resulting from a decrease in accounts receivable, as sales in the last half of June 2009 were lower than sales in the last half of March 2009. Trade accounts payable and accrued liabilities increased $1,773,144 for the six months ended June 30,2009 primarily due to an increase in purchased coal activity during this period. Investing Activities Investing activities resulted in a net cash decrease of $4,785,003 and $10,725,937 for the three and six months ended June 30, 2009, respectively. In the second quarter 2009, the Company invested $2,477,578 in short term certificates of deposit in order to increase the yield on its short term investments. Payments for mine development and mining rights of $1,182,983 and $1,720,693 for the three and six months ended June 30,2009, respectively, were primarily for development costs for the Radio Hill, KO, Back in Black, and Gryphon mines. The Companys investing activities also included $3,307,259 incurred to acquire the Petersburg Coal sublease in the first quarter 2009. Capital expenditures for the three and six months ended June 30, 2009 were $1,720,315 and $7,672,731, respectively. For the six months ended June 30,2009, $5,821,290 was invested in three trucks, a dozer and a loader that were financed through term loans. The remaining $1,851,441 was primarily spent on the preparation plant at the Briar Hill mine, and costs for relocating the Companys maintenance and administrative mine operations to a location centrally located to its Western Kentucky surface operations. |
Phoenix Coal Inc. Managements Discussion and Analysis Three and Six Months Ended June 30,2009 Financing Activities Financing activities used cash of $2,115,250 and $4,445,400 for the three and six months ended June 30, 2009, respectively. The majority of the financing activities were payments on equipment financing and bank debt Coal Sales Contract Revisions As at June 30, 2009, the Company had coal sales contract commitments of approximately 5.3 million tons at a weighted average price of $34.65 that extend through 2012. As at the filing of the MD&A, the Companys coal sales commitments before adjustments for BTU or transportation (if applicable in the contract) are detailed in the table below. The timing of the commitments is based on renegotiated contracts, proposed terms and preliminary discussions with customers about deferring some additional tonnage. Q3-04 2009 2010 2011 2012 Total Commitments (tons) 1,069,062 2,319,866 1,629,287 288,473 5,306,688 Avg. sales price $34.20 $34.90 $34.95 $32.66 $34.65% of 11,500 BTU contracts 49% 43% 54% 74% 49% Acquisitions Petersburg Coal Sublease In March 2009, the Company entered into a sublease agreement with Petersburg Coal, LLC (Petersburg) to sublease mineral reserves which are contiguous to its Gryphon Mining Complex, formerly known as the Pratt Mine. Under the terms of the sublease, the Company paid $3,000,000 at closing, assumed $192,178 in liabilities, and will pay an additional $3,000,000 upon satisfactory completion of certain contingencies, including receipt of all required permits from Petersburg. The Company also incurred transaction costs related to the sublease of $115,081, bringing the total cost of the sublease to $6,307,259. A mineral reserve and mineral resource evaluation prepared in accordance with National Instrument 43-101 (NI43-101) of the Gryphon Mining Complex was prepared as at April 1, 2009 by an independent geological and engineering consulting firm. Based on the report, at the Gryphon Mining Complex the Company controls 68.4 million tons of proven and probable coal mineral reserves, 3.7 million tons of underground measured and indicated coal resources, and 0.2 million tons of inferred coal resources. The costs of the sublease were allocated to the following identifiable assets: Prepaid royalties $172,413 Mining rights 6,134,846 $6^07,259 The Company is in the process of finalizing its valuation of the assets acquired and liabilities assumed for this sublease. The above allocations are preliminary estimates of fair value and may differ from the final allocation and the differences may be material. The Company will finalize the allocations within one year of the execution of the sublease. |
Phoenix Coal Inc. Managements Discussion and Analysis Three and Six Months Ended June 30,2009 Outstanding Share Data As at August 14, 2009, the Company had 150,045,552 common shares issued and outstanding. In addition, there were 11,058,830 stock options, 33,239,283 warrants and 2,514,286 brokers options (which entitle the holder to purchase one common share and one half of one warrant) outstanding as at August 14,2009. If all options, warrants, and brokers* options (including the subsequent exercise of the warrants purchased) were exercised and issued, it would bring the fully diluted issued common shares to a total of 198,115,094, and would generate cash of approximately $74,000,000. Wim regard to the outstanding stock options, under the terms of the Companys stock option plan, the sale of the surface mining assets and associated liabilities previously discussed could, depending on the final valuation of the sale, cause all options outstanding to become fully vested. Subsequent Events On July 28, 2009, the Company executed an amendment to a coal sales contract with one of its customers. Under the original terms of the contract, shipments to this customer were for 11,500 BTU quality coal and scheduled to be completed by December 31,2009. The amendment terms extend the period of time to fulfill the contracted tonnage shipments to December 31, 2012 and decrease the minimum BTU guarantee to 11,400 BTU for coal shipped in 2009 and 2010. Related Party Transactions The Company enters into transactions with shareholders and/or affiliated entities that have some level of common ownership with the Company. A summary of the related party transactions and balances follows for the six months ended June 30,2009 and 2008: Six Months Ended 2009 2008 Expenses: Consulting fees $ $156,000 Rent and miscellaneous 32,925 Accounts receivable 16,858 Accounts payable 3,741 The above expense amounts were paid to MHI Energy Partners, LLC, which amounts were applied towards, among other things, salaries, overhead and benefits for individuals who provided services. These transactions are also in the normal course of business, and are recorded at the consideration established and agreed to by the related parties. David Wiley and Timothy Fogarty were managing directors of MHI Energy Partners, LLC. David Wiley is currently an officer and director of the Company and Phoenix, and Tim Fogarty resigned as a director of Phoenix in September 2008. During the second quarter of 2008, the Company discontinued these payments to MHI. Commitments and Contingent Liabilities In the normal course of business, the Company makes various commitments and incurs certain contingent liabilities including liabilities related to asset retirement obligations and financial obligations in connection with mining permits that are not reflected in the accompanying consolidated balance sheet The Company does not anticipate any material losses as a result of these transactions. In accordance with Kentucky state law, the Company is required to post reclamation bonds to assure that reclamation work is completed. Outstanding reclamation bonds related to surface mining operations totaled approximately $12.5 million as at June 30, 2009 and approximately $11.0 million as at December 31,2008. These bonds are secured by letters of credit or certificates of deposit issued by a bank equal to the amount of the outstanding reclamation bonds. The letters of credit are collateralized by the restricted cash and certificates of deposit on die consolidated balance sheet of $12,517,297 and 11,638,921 as at |
Phoenix Coal Inc. Managements Discussion and Analysis Three and Six Months Ended June 30,2009 June 30, 2009 and December 31, 2008, respectively. Pursuant to the surface mining operation sale detailed in note 2, approximately $5,849,000 of the Companys cash-collateralized reclamation bonds will be replaced by the purchaser. As a result, as at June 30, 2009, the Company has classified $5,849,000 of the restricted cash and certificates of deposit as a current asset The Company leases certain office space under a long-term operating lease running through 2009. Future non-cancelable minimum lease commitments under this lease as at June 30, 2009, payable in 2009, totaled $114,597. This lease is not related to the surface mining operations held for sale. A significant amount of the Companys surface and underground coal reserves are controlled through leasing arrangements and non-cancellable royalty lease agreements under which future minimum lease payments are due. In the ordinary course of business, the Company enters into contracts to purchase diesel fiiel from local suppliers for physical delivery at specified prices. Pursuant to these contracts, the Company does not own a futures or options position in the purchased fuel. As at, and subsequent to, June 30, 2009, the Company has executed purchase contracts for a total of 2,562,000 gallons to be delivered in 2009 and 2010 at a total cost of $5,672,407, or an average weighted price of $2.21 per gallon. These fuel contracts are exclusively related to the surface mining operations held for sale. In 2007, the Company entered into a master coal purchase and sale agreement (the Master Agreement) to purchase coal fines recovered and processed by Covol Fuels No. 2, LLC (Covol) from two coal slurry reserve areas in Muhlenberg County, Kentucky. On July 6, 2009 the Company executed an amendment to the Master Agreement (the Amended Master Agreement) revising the annual purchase and sale tonnage commitments. The term of the Amended Master Agreement runs through the exhaustion of the reserves (the Term). During the Term of the Amended Master Agreement, by July 1 of each year, the Company and Covol will agree to the annual tonnage commitment (the Xommitment) that Covol will produce and that the Company will purchase for the next calendar year. For the calendar year 2010 the Commitment cannot be less than 360,000 tons and for subsequent years the Commitment cannot be less than 400,000 tons. The price to be paid by the Company for the coal fines is dependent on the price at which the fines are sold by the Company to its customer, but not less than $24.50 per ton. Additionally, the Company has the first right of refusal to purchase any tons produced by Covol in excess of the Commitment, but up to 720,000 tons annually. This Master Agreement is exclusively related to the surface mining operations held for sale. In June 2009, the Company entered into a coal supply agreement with an Illinois Basin producer to purchase 20,000 tons of coal per month from July 2009 through December 2009 at a purchase price of $39.00 per ton. Upon mutual agreement of the parties to the coal supply agreement, the term of the agreement may be extended to December 31, 2010. This coal supply agreement is exclusively related to the surface mining operations held for sale. As part of the Renfro Equipment Inc. acquisition in July 2008, the Company agreed that if, by July 31, 2010, it acquires at least 1.5 million reserve tons as defined by National Instrument 43-101 (NI 43-101) due to the direct efforts of the sellers (Additional Reserves), the Company will pay the sellers $1,000,000 for the first 1.5 million tons of reserves, plus $0.50 per ton for each reserve ton in excess of 1.5 million. The acquisition closing documents define a specific territory from wh ich the Additional Reserves can be acquired. The acquisition of the Additional Reserves must be on terms and conditions acceptable to the Company in its sole, reasonable discretion. As at June 30,2009, the sellers had provided several mineral leases to the Company. However, the analysis and drilling that is required to qualify these properties as reserve tons under the definition of M 43-101 is in its early stages. Therefore, it is not yet probable that the sellers will deliver 1.5 million reserve tons to the Company, so no liability has been currently accrued on the consolidated balance sheet to the sellers. This commitment is exclusively related to the surface mining operations held for sale. |
Phoenix Coal Inc. Managements Discussion and Analysis Three and Six Months Ended June 30,2009 Business Environment and Risks The Companys operations are subject to the risks normally inherent in the operation and development of coal properties. There is no assurance of developing economic coal reserves in commercial quantities. Operational risks include weather, geologic anomalies, competition, potential transportation interruptions, a complex regulatory regime and environmental and safety concerns. Financial and liquidity risks include commodity price fluctuations, interest rates, and the costs of goods and services. The Company uses a variety of means to help minimize its business risks. The Companys risk exposures and the impact on the Companys financial instruments are summarized below: Credit Risk: Credit risk is the risk of a financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligation. The Company had invested approximately $15,630,000 of its cash and cash equivalents (including restricted cash and investments) and short-term investments in a U.S. financial institution, which as at June 30, 2009, carried Standard and Poors investment ratings on their deposits of A-2 to BBB+. As at June 30, 2009, approximately $3,343,000 of the cash and cash equivalents balance was invested in a money market fund managed by this financial institution, which is guaranteed until September 18, 2009 by the U.S. Treasury Department under the Temporary Guarantee Program for Money Market Funds. The Company has not experienced any losses on its deposits with this financial institution. The Company is also subject to credit risk from its trade accounts receivable. While economic factors can affect credit risk, the Company manages risk by providing credit terms on a case by case basis. Customers are primarily investment grade companies and quasi-governmental agencies. As a result, the Company has not experienced any instances of non-payment. The Company also invests in short-term investments issued by the United States government, such as Treasury bills and Treasury notes. Historically, these types of investments have been AAA rated, so the Company does not anticipate any risk related to default on these investments by the issuer. As at June 30, 2009, the total fair value of assets subject to credit risk, including cash and cash equivalents (including restricted cash and investments), short-term investments, and trade accounts receivable is their carrying value of $36,579,666. Liquidity Risk; Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they come due. The Company manages its liquidity by ensuring that there is sufficient capital to meet short and long-term business requirements, after taking into account cash flows from operations and the Companys holdings of cash, cash equivalents and short-term investments. The Company also strives to maintain sufficient financial liquidity at all times in order to participate in investment opportunities as they arise, as well as to withstand sudden adverse changes in economic circumstances. Management forecasts cash flows for its current and subsequent fiscal years to predict future financing requirements. Future requirements are met through a combination of credit commitments and access to capital markets. As at June 30, 2009, the Company had $20.8 million of cash, cash equivalents, and short-term investments. Interest Rale Risk: Interest rate risk is the risk borne by an interest-bearing asset or liability as a result of fluctuations in interest rates. Financial assets and financial liabilities with variable interest rates expose the Company to cash flow interest rate risk. The Companys most significant interest rate risk arises from its investments in marketable securities and cash equivalents. However, the matu rity on these instruments is generally less than ninety days, thereby mitigating the exposure to the impact of changing interest rates. The Companys long-term debt consists of only fixed rate notes. |
Phoenix Coal Inc. Managements Discussion and Analysis Three and Six Months Ended June 30,2009 Currency Risk The Companys functional currency is the U.S. dollar and the Companys sales are denominated in U.S. dollars. As the Company operates in an international environment, some of the Companys financial instruments and transactions are denominated in currencies other than the U.S. dollar. The results of the Companys operations are subject to currency transaction risk and currency translation risk. As at June 30, 2009, the Company had no material financial instruments that were denominated in non U.S. currencies. Critical Accounting Estimates The Companys consolidated financial statements are prepared in accordance with generally accepted accounting principles in Canada and, in preparing these statements, management must make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses. The estimates and assumptions are believed to be reasonable under the circumstances and are based on historical experience and current conditions. The use of other assumptions could result in different estimates, and actual results may vary from results based on these estimates. As events occur and additional information is obtained, these estimates may be subject to change. Estimates are deemed critical when the Companys financial condition or results of operations could be materially impacted by a change in estimate. The Companys significant accounting policies are discussed in note A of the Companys December 2008 consolidated financial statements. The following is a discussion of the critical accounting estimates used to determine the financial results of the Company. Mining Rights. Mineral Reserves and Mine Development Mining rights, mineral properties and development assets include expenditures to acquire and develop mineral reserves, as well as development costs incurred to develop new reserves in advance of production. Depletion of producing properties, and amortization of mining rights and development costs, are based on units of production over the estimated proven and probable reserves of the respective coal properties. The determination of coal reserves requires a number of assumptions and estimates, including geological sampling and modeling as well as estimates of future coal prices and future production costs. Estimates of the reserves may change based on additional information obtained subsequent to the assessment date. This may include data obtained from exploration drilling, significant changes in the price of coal and changes in estimates of the cost of production. A change in the estimate of reserves could result in a change in the rate of depletion, development amortization, or impairment of the reserves, resulting in a write down. Mining rights and mine development are tested for impairment when events or changes in circumstances indicate that their carrying amount may not be recoverable. This impairment testing is based on estimated future undiscounted cash flows to be realized from the Companys mining operations. These future cash flows are developed using assumptions mat reflect the long-term operating plans given managements best estimate of future economic conditions, such as revenues, production costs, and reserve estimates. A change in these factors could result in a modification of the impairment calculation. Future Income Taxes The Company is subject to Canadian tax and U.S. federal income tax as well as income tax of multiple state jurisdictions. The tax years 2005 tiirough 2008 remain open to examination for Canadian, U.S. federal income tax and various state income tax matters. The expense for income taxes includes federal and state income taxes currently payable and those deferred or prepaid because of temporary differences between the financial statement and the tax basis of assets and liabilities. As a result of losses from operations, the Company has recorded a valuation allowance against its future tax assets as it does not believe it is more likely than not these assets will be realized. Should these tax assets be realized, the valuation allowance would be reduced accordingly. |
Phoenix Coal Inc. Managements Discussion and Analysis Three and Six Months Ended June 30,2009 Asset Retirement Obligations The Company estimates its ARO liabilities for final reclamation and mine closure based upon detailed engineering calculations of the amount and timing of the future cash spending for a third party to perform the required work. Spending estimates are escalated for inflation and then discounted at the credit-adjusted risk-free rate. The Company records an ARO asset associated with the discounted liability for final reclamation and mine closure. The obligation and corresponding asset are recognized in the period in which the liability is incurred. The ARO asset is amortized on the units-of-production method and the ARO liability is accreted to the projected spending date. As changes in estimates occur (such as mine plan revisions, changes in estimated costs or changes in timing of the performance of reclamation activities), the revisions to the obligation and asset are recognized at the appropriate credit-adjusted risk-free rate. The Company also recognizes an obligation for contemporaneous reclamation liabilities incurred as a result of surface mining. Contemporaneous reclamation consists primarily of grading, topsoil replacement, and revegetation of backfilled pit areas. A progression of the asset retirement obligations recorded on the consolidated balance sheet is as follows: Total asset retirement obligations as at December 31,2007 $ 3,757,353 Liabilities acquired 1,131,000 Liabilities incurred 166,083 Accretion 189,132 Liabilities settled (919,568) Total asset retirement obligations as at December 31,2008 4324,000 Liabilities incurred 670,000 Accretion 146,805 Liabilities settled (214,754) Total asset retirement obligations as at June 30,2009 4,926,051 Less current portion 2,300,000 Less asset retirement obligations associated with assets held for sale 2,587,981 $38,070 Share-Based Compensation Compensation cost attributable to all share options granted is measured at fair-value at the grant date using the Black-Scholes model and expensed over the vesting period with a corresponding increase to stock options and warrants in shareholders equity. In determining the fair value, the Company makes estimates for expected volatility of the shares as well as an estimated discount rate. Changes to these estimates could result in the Mr-value of the share-based compensation to be less than or greater than the amount recorded, Initial Adoption and Changes In Accounting Policies All accounting policies adopted by the Company are in accordance with Canadian generally accepted accounting principles (GAAP). The following financial reporting standards are applicable to the Company in 2009. New Accounting Policies Goodwill and Intangible Assets: The CICA has issued a new standard, CICA Section 3064, Goodwill and Intangible assets, which establishes revised standards for recognition, measurement, presentation and disclosure of goodwill and intangible assets and is effective January 1, 2009. Concurrent with the introduction of this standard, the CICA withdrew EIC-27, Revenues and Expenses during the pre-operating period. This standard has had no material impact on the Companys consolidated financial statements. |
Phoenix Coal Inc. Managements Discussion and Analysis Three and Six Months Ended June 30,2009 Financial Instruments: The Emerging Issues Committee (EIC) has issued EIC-173, Credit Risk and the Fair Value of Financial Assets and Financial Liabilities, which clarifies the application of credit risk when determining the fair value of financial assets and liabilities. EIC-173 is effective for interim and annual financial statements for periods ending on or after January 20, 2009. This standard has had no material impact on the Companys consolidated financial statements. Mining Exploration Costs: The EIC has issued EIC-174, Mining Exploration Costs, which discusses the circumstances under which exploration costs may be capitalized. Additionally, EIC-174 clarifies the timing for testing capitalized exploration costs for impairment. EIC-174 is effective for interim and annual financial statements issued after March 27,2009. This standard has had no material impact on the Companys consolidated financial statements. Future Accounting Changes International Financial Reporting Standards (IFRS): In 2006, the Canadian Accounting Standards Board (AcSB) published a new strategic plan that will significantly affect financial reporting requirements for Canadian companies. In February 2008, the AcSB announced that Canadian GAAP for publicly accountable enterprises will be converged with IFRS effective in calendar year 2011. The Company will adopt IFRS for the fiscal year beginning January 1, 2011, with restatement for comparative purposes of amounts reported by the Company for the fiscal year beginning January 1,2010. The Company is currently in the planning phase of the conversion, which includes identifying potential differences between GAAP and existing IFRS as at June 30, 2009, as well as proposed IFRS which may be in effect in 2011. The Company is utilizing both internal and external resources to identify and ultimately quantify these differences and the impact that they will have on accounting policies, information technology and data systems, internal control over financial reporting, disclosure controls and procedures, financial reporting, and business activities. Employees responsible for financial reporting have attended IFRS training, have begun IFRS accounting policy development, and initiated development of an IFRS project timeline Quantification of GAAP and IFRS differences has not yet been determined due to the need to evaluate internal data and make final policy choices and elections. Reclassiflcations: Certain of the 2008 figures have been reclassified to conform to the 2009 financial statement presentatioa Disclosure Controls and Procedures Disclosure controls and procedures have been designed to ensure that information required to be disclosed by the Company is accumulated and communicated to the Companys management as appropriate to allow timely decisions regarding required disclosure. For the fiscal year ended December 31, 2008, an evaluation was commissioned by the Company under the supervision of the CEO and CFO and with the participation of management of the effectiveness of the Companys disclosure controls and procedures as defined under the rules adopted by the Canadian securities regulatory authorities. Based on this evaluation, and that there have been no material changes in disclosure controls and procedures in 2009, the Companys CEO and CFO have concluded as at June 30, 2009, that the Companys disclosure controls and procedures provide reasonable assurance that material information related to the Company is made known to them for disclosure in these financial statements. It should be noted that while the Companys CEO and CFO believe that the Companys disclosure controls and procedures provide a reasonable level of assurance that they are effective, they do not expect that the dis closure controls and procedures or internal controls over financial reporting will prevent all errors and fraud. A control system, no matter how well conceived or operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met |
Phoenix Coal Inc. Managements Discussion and Analysis Three and Six Months Ended June 30,2009 Internal Controls over Financial Reporting Internal controls over financial reporting are designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external reporting purposes in accordance with generally accepted accounting principles in Canada. Management is responsible for establishing and maintaining adequate internal controls over financial reporting appropriate to the nature and size of the business to provide reasonable assurance regarding the reliability of financial reporting for the Company. However, any system of internal control over financial reporting has inherent limitations and can provide only reasonable assurance with respect to financial statement preparation and presentation. The Company uses the COSO control framework. For the fiscal year ended December 31,2008, an evaluation was commissioned by the Company under the supervision of the CEO and CFO and with the participation of management of the effectiveness of the Companys internal control over financial reporting. Based on this evaluation, and that there have been no material changes in internal controls over financial reporting in 2009, the CEO and CFO have concluded that the design and operation of the Companys internal controls over financial reporting were effective as at June 30, 2009. Management is continually monitoring and revising its control procedures and processes. Due to the size of its finance staff, there is not complete segregation of duties in the Company. However, for more complex areas of accounting and accounting estimates, the CFO and Controller review each others work. |
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Oxford Mining Company, LLC, Phoenix Coal Inc., Phoenix Coal Corporation, and Phoenix Newco, LLC Acquisition Agreement Schedule Schedule 4.7 (d) (vii) Leased Real Property Disputes and Royalties Advance Royalties as of July 31,2009 -All Recoupable under terms of lease agreements Company Lessor Amount R&L Winn, inc. Loraine McFadden CundifF $ 1,840 R&L Winn, Inc. Loraine McFadden Cundiff 51S R&L Winn, Inc. Loraine McFadden Cundiff 5,760 R&L Winn, Inc. Loren R. and Kay Lee 15,000 R&L Winn, Inc. Donaid and Ellen Lee 2,550 R&L Winn, Inc. JeffEubanks 600 R&L Winn, Inc. Tom Eubanks 600 R&L Winn, Inc. Talmage and Jean Rogers 3,750 R&L Winn, Inc. James Rogers 7,500 R&L Winn, Inc. Martha Rogers Haas 3,750 R&L Winn, Inc. Total 41,865 Evergreen Minerals Co., Inc. James A. and Connie Sue Wells 2,000 Evergreen Minerals Co., Inc. Total 2,000 Charolais Mining Company, LLC Talmage and Jean Rogers 15,500 Charolais Mining Company, LLC James Rogers 15,500 Charolais Mining Company, LLC Martha Rogers Haas 15,500 Charolais Mining Company, LLC Sue R. Johnson 15,500 Charolais Mining Company, LLC Howard H. Revlett 2,460 Charolais Mining Company, LLC Total 64,460 C&R Coal Inc. Roger A. France 1,350 C&R Coal Inc. Shirley Adler 2,800 C&R Coal Inc. Total 4,150 Renfro Equipment Inc. Jon Geibel 23,000 Renfro Equipment Inc. Louis & Brenda Baggett 1,000 Renfro Equipment Inc. Lisa & John Fairchild 1,000 Renfro Equipment Inc. Terry McCay 1,000 Renfro Equipment Inc. Total 26,000 Total Advanced Royalties $138,475 |
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Oxford Mining Company, LLC, Phoenix Coal Inc., Phoenix Coal Corporation, and Phoenix Newco, LLC Acquisition Agreement Schedule Schedule 4.10 (a) Tax Returns on Extension and Returns Filed after Due Date Tax Returns on Extension I Phoenix Company Form Type Period Ending Extension Date Federal Consolidated Federal Form 1120 09/15/2009 Consolidated KY Form 720 KY -10/15/2009 Phoenix Coal Corporation Consolidated IL Form IL-1120 12/31/2008 IL-10/15/2009 R&LWinn, Inc. Consolidated returns listed above 12/31/2008 See above Crittenden County Coal, Inc. Consolidated returns listed above 12/31/2008 See above Pact Resources LLC (disregarded entity) Consolidated returns listed above 12/31/2008 See above Evergreen Minerals Co., Inc. Consolidated returns listed above 12/31/2008 Sea above Old Liberty Equipment Co., Inc. Consolidated returns listed above 12/31/2008 See above Maroon Reclamation, LLC (disregarded entity) Consolidated returns listed above 12/31/2008 See above Phoenix Coal Processing, LLC (disregarded entity) Consolidated returns listed above 12/31/2008 See above Dynamic Separations, LLC (disregarded entity) Consolidated returns listed above 12/31/2008 See above Charolais Mining Company, LLC (disregarded entity) Consolidated returns listed above 12/31/2008 See above Charolais Coal Sales, LLC (disregarded entity) Consolidated returns listed above 12/31/2008 See above C & R Coal Inc. Consolidated returns listed above 12/31/2008 See above Phoenix Coal Inc. Consolidated returns listed above 12/31/2008 See above Renfro Equipment Inc. Consolidated returns listed above 12/31/2008 See above Federal Federal Form 1065 09/15/2009 Schoate Mining Co., LLC KY Form 765 12/31/2008 I KY-10/15/2009 Tax Returns Filed after Due Date I Date Fjed/To Be Phoenix Company Form Type Period Ending Filed Phoenix Coal Corporation [Amended form 1099 I 12/31/2008 I 9/30/2009 Canadian T2 Corporation Income Tax Phoenix Coal Inc. Return 6/26/2008 7/7/2009 Federal Form 1120S Short period ending C & R Coal Inc. KY Form 720S 07/31/08 9/15/2009 Federal Form 1120S Short period ending Renfro Equipment Inc. KY Form 720S 07/31/08 9/15/2009 All returns will be filed and copies provided to Buyer prior to the extension date of the respective tax return. No tax estimates were due or have been paid on the 2008 federal or state tax returns due to a significant tax loss for the 2008 reporting year. |
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Oxford Mining Company, LLC, Phoenix Coal Inc., Phoenix Coal Corporation, and Phoenix Newco, LLC Acquisition Agreement Schedule Schedule 4.10 (c) Tax Returns Previously Audited, Assessments Pending on Audited Returns Phoenix Group Entity Audit Audit Period Audit Conducted Phoenix Coal Corporation [Office of Surface Mining (OSM1) [July 1, 2006 -March 31, 2009 I 2nd Qtr 2009 Schoata Mining Co., LLC Office of Surface Mining (OSM1) January 1,2005 March 31,2009 2nd Qtr 2009 R&LWinn, Inc. Office of Surface Mining (OSM1) July 1, 2006 March 31, 2009 2nd Qtr 2009 Crittenden County Coal, Inc. Office of Surface Mining (OSM1) January 1, 2003 March 31,2009 2nd Qtr 2009 Charolais Mining Company, LLC Office of Surface Mining (OSM1) January 1, 2007 March 31, 2009 2nd Qtr 2009 Phoenix Coal Processing, LLC Office of Surface Mining (OSM1) January 1, 2007 March 31, 2009 2nd Qtr 2009 C&R Coal Inc. Office of Surface Mining (OSM1) October 1, 2004 March 31, 2009 2nd Qtr 2009 Renfro Equipment Inc. Office of Surface Mining (OSM1) July 1, 2002 March 31. 2009 2nd Qtr 2009 Dynamic Separations [Office of Surface Mining (OSM1) IJanuary 1, 2003 -April 1. 2009 | 2nd Qtr 2009 All OSM audits are being finalized. Sellers currently do not anticipate any material adjustments resulting from these audits. Phoenix Coai Corporation Sales and Use Tax October 1,2005 June 30, 2009 To begin August 11,2009 Schoate Mining Co., LLC Sales and Use Tax October 1, 2005 June 30, 2009 To begin August 11, 2009 Old Liberty Equipment Co., Inc. Sales and Use Tax January 1, 2005 December 31, 2008 To begin August 11, 2009 Charolais Mining Company. LLC Sales and Use Tax January 1, 2007 June 30. 2009 To begin August 11, 2009 Phoenix Coal Processing, LLC Sales and Use Tax January 1. 2007 June 30, 2009 To begin August 11, 2009 Schoate Mining Co., LLC [Severance Tax lOctober 1, 2005 June 30, 2009 |To begin August 11, 2009 |
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Schedule 4.14(d) contd R&lWlnn.hc. 8496049 193338 6/24/2009 104(a) 6/24/2009 C Y 77.1304 1,026.00 Proposed 1,026.00 0 R&LWlnn, Inc. 8496050 193338 6/24/2009 104(a) 6/24/2009 C N 77.701 224 Proposed 224 0 R&LWlnn, Inc. 8493553 181557 3/3/2009 5/14/2009 104(a) 3/3/2009 C Y 77.1103(d) 745 Closed 745 745 R&l Winn, Inc. 8493554 181557 3/3/2009 S/14/2009 104(a) 3/3/2009 C Y 77.1109(e) 745 Closed 745 745 R&LWInn,lnc 849355S 181557 3/3/2009 5/14/2009 104(a) 3/3/2009 C H 77.1109(c)(1) 150 Closed ISO 150 R&L Winn, Inc. 8493556 1815S7 3/3/2009 5/14/2009 104(a) 3/3/2009 C Y 77.404(a) 745| Closed 74S| 745 Schoate Mining Co., IIC 8496055 7/8/2009 104(a) 7/8/2009 C Y 77.1104 Not Assessed Yet Schoate Mining Co., Lie 8496056 7/B/2009 104(a) 7/8/2009 C Y 77.1605(1) Not Assessed Yet Schoate Mining Co., liC 8493691 185353 3/23/2009 6/17/2009 104(a) 3/23/2009 C H 48J9(a) 162 Closed 162 162 Schoate Mining Co., UX 8493560 3/16/2009 107(a) 3/16/2009 O N/A Non-Assessable Schoate Mining Co., UC 8493681 1853S3 3/16/2009 6/17/2009 104(a) 3/16/2009 C Y 77.1710(g) 1,337.001 Closed I 137.001 137.00 Schoate Mining Co., ILC 8493682 185353 3/16/2009 6/17/2009 104(a) 3/16/2009 C Y 77.1104 1,795.00 Closed 1,795.00 1,795.00 Schoate Mining Co., LLC 8492402 182304 3/4/2009 5/21/2009 104(a) 3/4/2009 C N 77.404(a) 150 Closed 150 150 Schoate Mining Co., UC 8492405 182304 3/4/2009 5/21/2009 104(a) 3/5/2009 C N 77410(c) 150 Closed 150 ISO Schoate Mining Co., UC 8492406 182304 3/4/2009 5/21/2009 104(a) 3/11/2009 C N 77.1104 425 Closed 425 425 Schoate Mining Co., UC 8492407 182304 3/4/2009 5/21/2009 104(a) 3/5/2009 C N 77.1605(d) ISO Closed ISO 150 Schoate Mining Co., LIC 8492408 182304 3/4/2009 5/21/2009 104(a) 3/5/2009 C N 77.1104 176 Closed 176 176 Schoate Mining Co., UC 8493557 182304 3/4/2009 5/21/2009 104(a) 3/4/2009 C If 77.404(a) 807 Closed 807 807 Schoate Mining Co., UC 8493260 182304 2/19/2009 5/21/2009 104(a) 2/20/2009 C Y 77.400(a) 745 Closed 745 745 Schoate Mining Co., UC 8493541 182304 2/19/2009 5/21/2009 104(a) 2/20/2009 C Y 77.1104 1,657.00 Closed 1,657.00 1,657.00 Schoate Mining Co.. UC 8493542 182304 2/19/2009 5/21/2009 104(a) 2/20/2009 C Y 77.1104 1,657.00| Closed 1,657.00| 1,657 Phoenix Coal Procaaint, UC 8496043 6/16/2009 104(a) 6/16/2009 C Y 77400(a) Not Assessed Yet PtoCTl CoatPn)c nln ,ac 8496044 6/16/2009 104(a) 6/18/2009 C N 71.403(a) Not Assessed Yet Phoenh Coal ProcaMlng. LLC 8496045 6/16/2009 104(a) 6/29/2009 C N 77.1202 Not Assessed Yet Pho.nl. CmtProctsIng, LLC 8493131 184124 3/16/2009 6/5/2009 104(a) 3/16/2009 C Y 77.1104 150) Closed I ISOl 150 PtoxCaal Processing, UX 8493133 184124 3/16/2009 6/5/2009 104(a) 3A6/2009 C N 77.404(a) 100 Closed 100 100 Phoenix Coal Procuring. Lie 8493683 184124 3/16/2009 6/5/2009 104(a) 3/16/2009 C Y 77.400(a) 224 Closed 224 224 Phoanbe Coal Protesting, LLC 8493684 184124 3/16/2009 6/5/2009 104(a) 3/16/2009 c Y 77.701 224 Closed 224 224 Crittendcn County Coal Inc. 8494587 193091 6/22/2009 104(a) 6/23/2009 C N 100 Proposed 100 0 Crtttendan County Coal, Inc. 8494588 193091 6/22/2009 104(a) 6/23/2009 C N 4L12 100 Proposed 100 0 Crttanden County Coat Inc. 3860411 190244 5/13/2009 104(a) 5/13/2009 C N 77.1110 100 Closed 100 100 Otttandtn County Coal, Inc. 6695240 181319 2/26/2009 5/14/2009 104(a) 2/27/2009 C N 77.1104 100 dosed 100 100 CrittMden County C oal Inc. 8489952 178644 1/12/2009 104(a) 1/12/2009 C Y 62.160(b)(2) 2431 In Contest 243 0 Renfro Equipment hie. 8493743 6/11/2009 104(a) 6/15/2009 C N 77.506-1 Not Assessed Yet Renfro Equipment Inc. 8493740 6/10/2009 104(a) 6/15/2009 C Y 77.506-1 Not Assessed Yet Renfro Equipment Inc. 8493741 6/10/20O9 104(a) 6/15/2009 C N 77.506-1 Not Assessed Yet Renfro Equipment Inc. 8493742 6/10/2009 104(a) 6/15/2009 C N 77.506-1 Not Assessed Yet Renfro Equipment Inc. 8496041 6/10/2009 104(a) 6/10/2009 C Y 77.205(e) Not Assessed Yet Renfro Equipment he 8496042 6/10/2009 104(a) 6/15/2009 C Y 77.502 Not Assassed Yet Renfro Equipment Inc. 8493717 6/8/2009 104(a) 6/8/2009 C N 47.41(a) Not Assessed Yet Renfro Equipment Inc. 8493718 6/8/2009 104(a) 6/8/2009 C Y 77.502 Not Assessed Yet Ranfro Equipment Inc. 8493719 6/8/2009 104(a) 6/10/2009 C N 77.502 Not Assessed Yet Renfro Equipment Inc. 8493720 678/2009 104(a) 6/8/2009 C Y 77.202 Not Assessed Yet C6R Coal Inc. 8491689 185561 3/17/2003 6/19/2009 104(a) 3/18/2009 C N 77.1104 lPOl Closed I 100| 100 C&R Coal Inc. 8491690 185561 3/17/2009 6/19/2009 104(a) 3/18/2009 C N 77.1104 100 Closed 100 100 C&R Coal Inc. 8491691 185561 3/17/2009 6/19/2009 104(a) 3/18/2009 C N 77.1104 100 Closed 100 100 C&R Coal Inc. 8491692 18SS61 3/17/2009 6/19/2009 104(a) 3/18/2009 C Y 77.404(a) 362 Closed 362 362 C&R Coal he 8491693 185561 3/17/2009 6/19/2009 104(a) 3/18/2009 C Y 77.1104 362| Closed 362 362 Phoenix Coal Corporation 8496065 8/10/2009 104(a) 8/10/2009 C Y 77.404(a) Not Assessed Yet Phoenix Coal Corporation 8496046 6/22/2009 104(a) 6/22/2009 C Y 77.205(a) Not Assessed Yet Phoenix Coal Corporation 8496047 6/22/2009 104(a) 6/22/2009 C Y 77.400(a) Not Assessed Yet Phoenix Coal Corporation 8496048 6/22/2009 104(a) 6/23/2009 C Y 77.1104 Not Assessed Yet Ovuol»li Mlnint Company, U£ No Phoanto Coal Proowlng. LLC No Phoanix Coil ProceMlnt, IXC No PlrenteCcalProoimng.LlC 6691290 119337 4/30/2007 7/15/2007 104(a) 5/4/2007 C N TTAlOjcT $100.00 1 1 $100.00 * No State (DNR) Non-Compliances written to any Company in 2009. |
Notice of Violation (Non-Compliance) History Schedule 4.14(d) Company Permit Non-Comp # Date of NOV Abated Standard Reg Inspector Comment Fine Black Diamond Resources, Inc. 854-0423 13-0407 3/10/2005 10/5/2007 Contemporaneous Reclamation KAR 12:020 Reclaim all areas $ 1,200.00 Crittenden County Coal, Inc. 828-0001 13-0101 1/25/2006 7/2/2009 Method of Operation KAR 8*10 RobertYonts Obtain Corps permit/resolve the cease and desist order/Ensure Company stays out of watershed Black Diamond Resources, Inc. 854-02*2 13-0789 6/5/2006 6/8/2006 Water Monitoring KAR 16:100 Water Quality $2,300.00 Crtttenden County Coal, Inc. 828-0001 13-0102 8/21/2006 9/20/2006 Water dually KAR 16:070 Robert Yonts maintain sediment control berms Crittenden County Coal, Inc. 828-0001 13-0102 8/21/2006 10/5/2006 Backfilling and Grading KAR16:190 RobertYonts backfill and grade all rills/gullies $ 1,000.00 Black Diamond Resources, Inc. 854-0243 13-0563 4/9/2007 1/20/2009 Water Monitoring KAR 16:020 Daniel Bzenga Permit revision needed, off permit disturbance Charolais Mining Company, UjC 889-0136 13-0174 S/25/2007 6/2S/2007 Use of Explosives KAR16.120 BruceSampson KscOT«nueblastlngcijerattonsonirKMment#3untUabUstlr«rernediatlonplan has been submitted and approved $5,000.00 Crittenden County Coal, Inc. 854-5038 13-0121 8/13/2007 9/24/2009 Off Permit Disturbance KAR 7:040 GregLogsden Permit off permit disturbance Crittenden County Coal, Inc. 828-0001 13-0181 9/26/2007 7/24/2008 Backfilling and Grading KAR 16:190 RobertYonts stabifee all erosion Crittenden County Coal, Inc. 828-0001 13-0181 9/26/2007 7/24/2008 Topsoll KAR 16*50 RobertYonts failed to finish grade and seed Pennyrile Coal Company, Inc. 854-5026 13-0575 12/6/2007 12/20/2007 effluent limitations KP0ES KAR 5:065 Pennyrile Coal Company, Inc. 8S4-5026 13-0575 12/6/2007 12/20/2007 Water Monitoring KAR 18:070 Water Quality $12,350.00 Pennyrile Coal Company, inc. 854-5025 13-0603 3/25/2008 S/27/2008 Water Monitoring KAR 18:070 Water Quality $ 2,900.00 Pennyrile Coal Company, Inc. 854-5026 13-0603 3/25/2008 5/27/2008 Effluent limitations-KPDES KAR 5:065 Pennyrile Coal Company, Inc. 854-5026 13-0603 3/25/2008 5/27/2008 Method of Operations KAR 83)10 Comply with minor revision #10 S 800.00 C&R Coal Inc. 889-0124 13-O60S 4/2/2008 5/2/2008 Access Roads KAR 16:220 Cover haul road with rock 5 1,100.00 C&R Coal inc. 889-0124 13-0605 4/2/2008 7/7/2008 Contemporaneous Reclamation KAR 16:020 Backfill or advance pit on increment #4 $1,500.00 C&R Coal Inc. 889-0126 13-0767 4/2/2008 S/2/2008 Access Roads KAR 16320 BruceSampson S 1,000.00 C&R Coal Inc. 889*126 13-0767 4/2/2008 10/6/2008 Contemporaneous Rec KAR 164)20 BruceSampson $800.00 C&R Coal Inc. 889-0126 13-0767 4/2/2008 4/16/2008 Diversion Ditches BruceSampson C&R Coal Inc. 889*126 13-0767 4/2/2008 4/16/2008 Sediment Control KAR 16:020 BruceSampson dean out basin #5 C&R Coal Inc. 889-0151 13-0034 8/19/2009 pending Effluent Limitations KAR 5:065 Josh Hankins Sub standard water left permit-Basin 1 C&R Coal Inc. 889-01S1 13-0034 8/19/2009 pending Water Quality KAR 16:080 Josh Hankins Sub standard water left permit-Basin 1 C&R Coal Inc. 889-0152 13-0035 8/19/2009 pending fctf luent limitations KAR 5:065 Josh Hankins Sub standard water left permit-Basin 2 C&R Coal Inc. 88*0152 13-0035 8/19/2009 pending Water Quality KAR 16.-080 Josh Hankins Sub standard water left permit-Basin 2 C&R Coal Inc. 889-0152 13-0035 8/19/2009 pending Effluent Limitations KAR 5:065 Josh Hankins Sub standard water left permit-Basin 3 C&R Coal Inc. 889*152 13-0035 8/19/2009 pending Water Quality KAR 16:080 Josh Hankins Sub standard water left permit-Basin 3 Schoate Mining Co., LLC 889-0134 13-0258 6/25/2008 7/24/2008 Sediment Control KAR 16*90 Robert Lacey Fix emergency spillway as designed and replace with permanent spillway pipe Charolais Mining Company, LLC 889-0136 13-0007 9/24/2008 10/25/2 008 Impoundments KAR 16:100 BruceSampson Submit annual certifications Pennyrile Coal Company, Inc. 854-5026 13*003 12/17/2008 1/16/2009 Water Monitoring KAR 18:110 Daniel Eteenga Exceedance letter for 1st QJrDMR needed Black Diamond Resources, Inc. 854*243 13*011 12/18/2008 1/20/2009 Water Monitoring KAR 16:110 MikeVanover Exceedance letter for 2nd QJrDMR needed Renfro Equipment Inc. 889*116 13*014 2/18/2009 Non-Cor. Use of Explosives KAR 16:120 MikeVanover Scale dtetanceviolated-vTolatlon Vacated 4/27/09 R&LWInn.lnc. 889*135 13*015 3/5/2009 9/14/2008 Method of Operation KAR 8:010 MikeVanover not all surface drainage passed through sedimentation pond R&LWInn,lnc. 889*135 13*015 3/S/20OS 9/14/2009 WaterQuality KAR16*70 MikeVanover not all surface drainage passed through sedimentation pond Phoenix Coal Processing, LLC 854*253 13*020 3/11/2009 extended Backfilling and Grading KAR 16.-190 GregLogsdon Obtain perm* revision, re-increment Peyton pit Phoenix Coal Processing, LLC 854*253 13*020 3/11/2009 extended Contemporaneous Rec KAR 16:020 SregLogsdon back fill pit R&LWInn,lnc 889*135 13*016 3/13/2009 9/14/2009 Sediment Basin KAR16.-090 MikeVanover approval for onsita design changesto sediment basin Charolais Mining Company, LLC 889*136 13*012 3/18/2009 3/19/2O0S Effluent Limitations KAR 5:065 BruceSampson LowPH Schoate Mining Co., LLC 889*134 13*028 5/4/2009 Non-Cor. Use of Explosives KAR 16:120 Josh Hankins Ground vibration exceeded-Agreed Order $1^00.00 Schoate Mining Co., LLC 889*134 13-0029 5/12/2009 flflilliiljjif Contemporaneous Rec KAR 16:020 Josh Hankins Supplemental assurance needed-Permit Pending Schoate Mining Co., LLC 889*134 13*036 8/21/2009 pending Use of Explosives KAR 16:120 Josh Hankins CWiens Complaint-pre-blast survey not offered Charolais Mining Company, LLC 889*136 13-0025 6/11/2009 not active Backfilling and Srading KAR 16:190 BruceSampson Repair gullies Charolais Mining Company, LLC 889*136 13-002S 6/11/2009 not active Diversion Ditches KAR 16*80 BruceSampson Repair diversion ditch Charolais Mining Company, ac 889*136 13-002S 6/1L/20O9 6/12/2009 Water Quality KAR 16*70 BruceSampson WaterQuality Phoenix Coal Corporation 889*141 13-0023 6/25/2009 7/24/2009 Water Quality KAR16*70 MikeVanover Diversion Ditch not complete $1,200.00 Schoate Mining Co., LLC 889*134 13-02S8 6/25/2009 8/28/2008 Sedimentation Ponds KAR 16*90 Glenn Lacy Schoate Mining Co., LLC 889*134 13-0033 6/29/2009 Mon-Cor. Use of Explosives KAR 16:120 Josh Hankins Ground Vibration -Reports not kept properly-Accessed $1600 $1,600.00 R&LWInn.lnc. 889*135 13*024 7/9/2009 7/10/2009 Water CtaaRty KAR 16*70 MikeVanover allowed seep -Accessed $2600 R&LWinn,lnc. 889*135 13*024 7/9/2009 7/10/2009 General Hydrologic Requirements KAR 16:060 MikeVanover allowed seep R&LWinn,lnc. 889*135 13*024 7/9/2009 7/10/2009 Effluent limitations KAR 5*65 MikeVanover allowed seep S 2,600.00 R&LWmn,lnc. 889*135 13*027 7/9/2009 g|^^^^ Contemporaneous Rec KAR 16*20 MikeVanover began mining before posting assur. Bond-Permit Pending R&LWinn,lnc 889*135 13*027 7/9/2009 8/10/2009 WaterQuality KAR 16*70 MikeVanover failed to pass all surface drainage Renfro Equipment Inc. 889-0116 13*582 7/9/2003 j, extenoed||| Method of Operation KAR 8*10 MikeVanover Stream protection violated Phoenix Coal Corporation 889*141 13*584 7/14/2009 gf^p^l^gCorroimporaneousRec KAR 16*20 MikeVanover Supplemental assurance needed-Permit Pending Charolais Mining Company, LLC 889*136 13*777 7/14/2009 8/14/2009 Signs and Markers KAR 16*30 BruceSampson a partof permit perimeter not marked Charolais Mining Company, LLC 889*136 13*777 7/14/2009 not active Off Permit Disturbance KAR 7:040 BruceSampson permitting action to pick up approx 3.1 acres Phoenix Coal Corporation 889*141 13*583 7/24/2009 Non-Cor. Use Of Explosives KAR 16:120 MikeVanover Ground vibration exceeded |
Oxford Mining Company, IXC, Phoenix Coal Inc., Phoenix Coal Corporation, and Phoenix Newco, L.LC Acquisition Agreement Schedule Schedule 4.14(d) Customer and Purchased Coal Shortfalls Item 2: Jan-July 2009 Shortfall as of Sales Contract Shortfall 2009 Obligation Obligation 2009 Delivered 7/31/2009 Big Rivers R&LWmn, Inc. #465/522 180,000 105,000 64,780 40,220 Charolais Coal Sales #519 300,000 175,000 94,811 80,189 Charolais Coal Sales #520 200,000 116,667 172,472 (55,805) Louisville Gas & Electric 1,200,000 700,000 85,638 614,362 Kentucky Utilities 290,509 169,464 41,042 128,422 Duke Kentucky 100,000 58,333 52,580 5,753 Duke -Ohio (Mar- Dec 2009) 169,300 84,650 86,811 (2,161) Item 3: Purchased Coal Contract Jan - July 2009 Shortfall as of Shortfall 2009 Obligation Obligation 2009 Delivered 7/31/2009 Covol (per amendment) 515,000 300,417 171,363 129,054 |
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Oxford Mining Company, LLC, Phosnix Coal Inc., Phoenix Coal Corporation, and Phoenix Newco, LtC Acquisition Agreement Schedule Schedule 4.17 (a) APE Employee List Emp# last Name First Name Job Title/Position Employer Current Work Location Pay Rate Annual/Hrly Hire Date Prod Bonus Vacation Date of Signed Employment Agreement 0000247 Abbott Danny L Truck Schoate Briar Hill 18.00 1/15/2007 Yes 10 Days 0000131 Adams Keith L Parts Runner Charolals Cleaton l___ 18.00 1/2/2007 Yes 10 Days 0000212 Alexander Johnnie R Foreman C&R Jessup 65,000.00 1/1/2007 Yes 10 Days 0000013 Allen James R. Service Schoate Briar Hill 19.00 12/29/2003 Yes 10 Days 0000332 Allen Paul W. Dozer Schoate Briar Hill 19.00 6/16/2008 Yes 10 Days 0000082 Arnold Helen B. Mine Clerk Schoate Briar Hill 10.00 11/25/2002 Yes 10 Days 0000083 Arnold GaryL Dozer Winn KO 19.00 10/9/2006 Yes 10 Days 0000303 Arnold Anthony D. Truck Winn Winn North 18,50 10/8/2007 Yes 10 Days 0000237 Baize Jordan S Lab Piiuiiiiix Processing Island 18.00 1/1/2007 Yes 10 Days 0000263 Baize Danny R. Drill Winn K0 19.00 4/2/2007 Yes 10 Days 0000014 Baize, Jr. Claude Truck Schoate Briar Hill 18.50 3/27/2003 Yes 10 Days 0000366 Baker Justin M. Service Schoate Winn North 19.00 7/30/2008 Yes 10 Days 0000359 Baker Clint W. Service Renfro Jessup 19.00 7/21/2008 Yes 10 Days 0000396 Barnes ScottyL Service Schoate Briar Hill 19.00 2/16/2009 Yes 10 Days 0000248 Bartlett Christophers. Mechanic Helper Schoate Briar Kill 19.00 1/16/2007 Yes 10 Days 0000133 Bartlett Gregory J. Welder Charolals Cleaton 20.50 1/1/2007 Yes 10 Days 0000338 Beck MarkD. Grader Schoate Briar Hill 19.00 6/23/2008 Yes 10 Days 0000017 Beliles Robert E. Dozer Schoate Briar Hill 19.00 9/4/2001 Yes 10 Days 0000016 Belilies David G. Shovel Schoate Briar Hill 19.00 7/21/2002 Yes 10 Days 0000002 Blalock Christopher Maintenance Coordinator Charolals Cleaton 62,000.00 10/17/2006 Yes 10 Days 0000164 Boyd Hershel T Service Schoate Radio Hill 20.00 1/1/2007 Yes 10 Days 0000019 Branson David A. Parts Runner Schoate Briar Hill 18.50 4/20/2004 Yes 10 Days 0000294 Broaddus Jerry L Truck C&R KO 19.00 7/9/2007 Yes 10 Days 0000390 Brockman David W. Surveyor Schoate Cleaton 50,000.00 9/22/2008 10 Days 0000192 Brooks ScottT Deckhand Phoenix Processing Island 19.50 1/1/2007 Yes 10 Days 0000214 Brown Gilbert I Drill Winn Radio Hill 19.00 1/1/2007 Yes 10 Days 0000264 Brown Danny W. Truck C&R KO 18.00 4/2/2007 Yes 10 Days 0000213 Brown Donald Dozer Renfro Jessup 20.00 1/1/2007 Yes 10 Days 0000304 Bruce Michael J. Dozer C&R KO 19.00 10/8/2007 Yes 10 Days 0000097 Burbage Tommy Service C&R K0 19.00 9/11/2006 Yes 10 Days 0000328 Burden Kevin R. Dozer Schoate Jessup 19.00 5/27/2008 Yes 10 Days 0000238 Burgett Charles E Lab Phoenix Processing Island 18.50 1/1/2007 Yes 10 Days 0000215 Buslck Jesse C Dozer Schoate Radio Hill 19.00 1/1/2007 Yes 10 Days 0000137 Cain Jerry D. Electrician Phoenix Processing Island 22.50 1/12/2007 Yes 10 Days 0000085 Cansler David Trackhoe Winn Winn North 20.00 1/8/2004 Yes 10 Days 0000334 Cardwell Jr. Glendon R. Drill Schoate Briar Hill 19.00 6/16/2008 Yes 10 Days 0000098 Carter James Shovel Schoate Briar Hill 19.00 9/11/2006 Yes 10 Days 0000422 Carter RyanS. Truck Winn Winn North 17.00 6/8/2009 Yes 10 Days 0000202 Cartwrlght MlkelJ. Loader Winn Winn North 19.50 5/4/2009 Yes 10 Days |
APE Employee Ust Emp# Last Name First Name Job Title/Position Employer Current Work Location Pay Rate Annual/Hrly Hire Date Prod Bonus Vacation Date of Signed Employment Agreement 0000436 Carver Richard P. Truck Renfro Jessup 18.00 7/28/2009 Yes 10 Days 0000003 Cates Christy Office Manager Phoenbc Coal HQ 14.50 7/17/2006 10 Days 0000023 Clark Wendell R. Dozer Schoate Jessup 19.00 1/31/2006 Yes 10 Days 0000099 Clark Billy Don Drill Charolals Cleaton 20.00 1/15/2005 Yes 10 Days 0000024 Cobb ieffery D. Truck Schoate Briar Hill 18.00 11/8/2004 Yes 10 Days 0000302 Cobb Michael L Truck Schoate KO 18.00 10/8/2007 Yes 10 Days 0000374 Cobb Martin R. Truck Renfro Jessup 18.00 8/1/2008 Yes 10 Days 0000203 Colwell Jimmie Loader Phoenix Processing Island 19.00 1/1/2007 Yes 10 Days 0000405 Coombs James A. AP Clerk Phoenix Coal HQ 14.25 4/27/2009 10 Days 0000286 Copeland Arlesta L Mechanic Renfro Jessup 21.00 6/18/2007 Yes 10 Days 0000255 Copple Bobby T. Grader Schoate Radio Hill 19.00 2/28/2007 Yes 10 Days 0000329 Cor urn Timothy W. Dozer Winn Radio Hill 19.00 5/27/2008 Yes 10 Days 0000172 Covlngton Marvin D Shovel Schoate Radio Hill 19.50 1/1/2007 Yes 10 Days 0000004 Coyle Barry Maintenance Director Phoenix Coal Cleaton 80,000.00 8/3/2006 15 Days 0000437 Crick Chad E. Truck Winn KO 18.00 8/3/2009 Yes 10 Days 0000373 Crick Lyndell R. General Manager Renfro Jessup 75,000.00 8/1/2008 Yes 10 Days 0000295 Culbertson Alan W. General Manager- Quaility & Logistics Phoenix Coal Cleaton 105,000.00 7/16/2007 15 Days 0000420 Culbertsort Alan B. Pressure Washer Schoate Briar Hill 15.00 5/26/2009 Yes 10 Days 0000139 Cutlen Jimmie P. Welding Foreman Charolais Cleaton 65,000.00 1/1/2007 Yes 10 Days 0000101 Cunningham Jimmy Maintenance Supervisor C&R KO 65,000.00 1/15/2005 Yes 10 Days 0000399 Cuppett Robert R. Drill Schoate Jessup 19.00 2/23/2009 Yes 10 Days 0000258 Dame Calvin N. Foreman Phoenix Processing Schoate Prep Plant 65,000.00 3/5/2007 Yes 10 Days 0000086 Darnell Barry D. Mechanic Winn Winn North 21.50 9/18/2006 Yes 10 Days 0000026 Daugherty Jason B. Service Schoate Briar Hill 19.00 6/1/2005 Yes 10 Days 0000027 Daugherty JayC. Foreman Schoate Briar Hill 70,000.00 3/1/1999 Yes 10 Days 0000204 Daugherty AlexR Loader Phoenix Processing Island 19.50 1/1/2007 Yes 10 Days 0000210 Daugherty Darlene F Scalehouse Phoenix Processing Island 16.00 1/1/2007 Yes 10 Days 0000219 Daugherty Tommy J Mechanic Phoenix Processing island 21.00 1/1/2007 Yes 10 Days 0000140 Daugherty Marlin J. Maintenance Supervisor Charolais Cleaton 65,000.00 1/1/2007 Yes 10 Days 0000430 Daugherty Jr. Tommy J. Truck Winn Winn North 35.00 6/8/2009 Yes 10 Days 0000292 Davis Mark A. AR Phoenix Coal HQ 51,000.00 7/5/2007 10 Days 0000438 Delg John C. Mechanic Schoate Briar Hill 21.00 8/4/2009 Yes 10 Days 0000028 Dockery Stanford W. Shovel Schoate Briar Hill 19.00 12/16/2002 Yes 10 Days 0000279 Doss Billy J. Welder Schoate Schoate Prep Plant 20.00 4/30/2007 Yes 10 Days 0000362 Dunlap Duane R. Mechanic Schoate Radio Hill 21.00 7/23/2008 Yes 10 Days 0000343 Dunn Gaylynn Dozer C&R KO 19.50 10/26/2006 Yes 10 Days 0000410 Dunning Samuel L Dozer Winn KO 19.00 5/4/2009 Yes 10 Days 0000118 Durham Randy D. General Manager Phoenix Processing Schoate Prep Plant 70,000.00 6/10/2005 Yes 10 Days 0000029 Edens Michael S. Engineer Phoenix Coal HQ 75,000.00 3/15/2002 10 Days 0000344 Edwards James Loader C8!R Winn North 19.00 5/20/2002 Yes 10 Days 0000308 Elliott Michael A. Controller Phoenix Coal HQ 165,000.00 10/29/2007 15 Days 0000300 Fain Melissa A. AP Clerk Phoenix Coal HQ 13.50 8/27/2007 10 Days |
APE Employee List Emp# last Name First Name Job Title/Position Employer Current Work Location Pay Rate Annual/Hrly Hire Date Prod Bonus Vacation Date of Signed Employment Agreement 0OOO33S Faughn £hadA. Truck Schoate Radio Hill 18.00 6/16/2008 Yes 10 Days 0000031 Fisher Donald R. Dozer Schoate Briar Hill 19.00 11/7/2001 Yes 10 Days 0000032 Ford Brandon R, Mechanic Schoate Briar Hill 22.00 3/25/1999 Yes 10 Days 0000033 Ford David R. Loader Phoenix Processing Schoate Prep Plant 20.00 7/26/1999 Yes 10 Days 0000269 France Darren D. Mechanic Schoate Radio Hill 21.00 4/16/2007 Yes 10 Days 0000321 Franklin James T. Foreman Winn Radio Hill 65,000.00 3/24/2008 Yes 10 Days 0000143 Fuller Adrian C. Mechanic Charolais Cleaton 20.00 1/1/2007 Yes 10 Days 0000392 Gardner Benjamin J. Truck Schoate Winn North 18.00 1/19/2009 Yes 10 Days 0000428 Garner Christopher T. Truck Winn Winn North 15.00 6/8/2009 Yes 10 Days 0000346 Garris William R. Foreman C&R KO 70,000.00 12/12/2001 Yes 10 Days 0000393 Glffln Alan R. Truck Schoate Briar Hill 18.00 1/19/2009 Yes 10 Days 0000173 Glffln Raymond R Dozer Schoate Radio Hill 19.00 1/1/2007 Yes 10 Days 0000222 Giffin Charles W General Manager Schoate Briar Hill 80,000.00 1/1/2007 Yes 10 Days 0000223 Glffln TroyW Grader Renfro Jessup 19.00 1/1/2007 Yes 10 Days 0000144 Glora Christopher H. Mechanic Charolais Cleaton 20.00 1/1/2007 Yes 10 Days 000026S Goodaker Donald R Dozer Renfro Jessup 19.00 4/2/2007 Yes 10 Days 0000034 Groves Johnny R. Truck Schoate Briar Hill 18,00 10/19/2004 Yes 10 Days 0000347 Groves JeffJ. Mechanic C&R KO 21.50 2/8/2002 Yes 10 Days 0000388 Groves Scottie E. Service Renfro Jessup 19.00 9/12/2008 Yes 10 Days 0000280 Haaga Mathew A. COO Phoenix Coal HQ 250,000.00 5/1/2007 20 Days 12/5/2008 0000103 Haley tarry Dozer C&R KO 20.00 9/11/2006 Yes 10 Days 0000401 Hall Larry J. Mechanic C&R KO 2100 3/2/2009 Yes 10 Days 0000311 Hamilton Brian K Truck C&R KO 18.50 11/5/2007 Yes 10 Days 0000174 Hancock Ernie R Truck Schoate Radio Hill 18.00 1/1/2007 Yes 10 Days 0000441 Haney Terry N. Truck Winn KO 18.00 8/10/2009 Yes 10 Days 0000035 Hardesty Kenneth E. Dozer Schoate Briar Hill 19.00 4/30/2001 Yes 10 Days 0000389 Harklns Chad S. Parts Runner Charolais Cleaton 17.00 9/12/2008 Yes 10 Days 0000087 Harper Scott Pumper Winn Briar Hill 19.50 1/13/2003 Yes 10 Days 0000104 Hatfleld Samuel R. Loader C&R KO 19.00 9/11/2006 Yes 10 Days 0000145 Hawkins David L Mechanic Charolais Cleaton 20.00 1/1/2007 Yes 10 Days 0000386 Hayden Jeffrey J. SVP Engineering Phoenix Coal HQ 185,000.00 9/1/2008 20 Days 0000356 Hicklin Edward G. Loader Schoate Jessup 19.50 7/7/2008 Yes 10 Days 0000283 Hicks Sally W. AP Manager Phoenix Coal HO. 15.00 5/14/2007 10 Days 0000146 Hicks, Jr. Jerry R. Welder Charolais Cleaton 20.00 1/1/2007 Yes 10 Days 0000355 Holland Jeffrey R. Drill Schoate Radio Hill 19.00 7/7/2008 Yes 10 Days 0000397 Holt William G. Loader C&R KO 18.00 2/16/2009 Yes 10 Days 0000240 Hopper DanaL Asst. Controller Phoenix Coal HQ 62,000.00 1/1/2007 10 Days 0000417 Hopper Thomas E. Mechanic Winn Winn North 21.00 5/12/2009 Yes 10 Days 0000429 Hosklns Jason T. Truck Schoate KO 18.00 6/8/2009 Yes 10 Days 0000252 Howard Pamela D. Budgeting/Reporting Phoenix Coal HQ 75,000.00 2/5/2007 15 Days 0000287 Huddleston Loman L Prep Plant Operator Phoenix Processing Schoate Prep Plant 19.00 6/21/2007 Yes 10 Days 0000037 Hudson Larry R. Mechanic Schoate Briar Hill 19.00 5/15/2006 Yes 10 Days |
APE Employee List Emp# Last Name First Name Job Title/Position Employer Current Work Location Pay Rate Annua(/Hrly Hire Date Prod Bonus Vacation Date of Signed Employment Agreement 0000312 Hughlett John D. Truck Schoate Briar Hill 18.00 11/5/2007 Yes 10 Days 0000371 Igleheart Murtry M. Mechanic Renfro Jessup 21.00 8/1/2008 Yes 10 Days 0000039 Inglis Jonathan E. Mechanic Schoate Briar Hill 21.00 9/6/2006 Yes 10 Days 0000040 tnglis Sherman G. Grader Schoate Briar Hill 19.00 2/21/2005 Yes 10 Days 0000041 Inglis Travis W. Truck Schoate Briar Hill 18.00 11/3/2004 Yes 10 Days 0000256 Inglis Jordan W. Dozer Winn Briar Hill 19.00 2/28/2007 Yes 10 Days 0000257 Jackson Charles A. Truck Schoate Radio Hill 18.50 2/28/2007 Yes 10 Days 0000435 Jackson Ronny F. Service Winn Winn North 19.00 7/28/2009 Yes 10 Days 0000415 Johnson Tony W. Service Helper Schoate Briar Hill 19.00 5/11/2009 Yes 10 Days 0000259 Johnson Brian S. Service C&R Winn North ,___19.00 3/5/2007 Yes 10 Days 0000370 Johnson Jeremy D. Truck C&R Winn North 18.00 8/4/2008 Yes 10 Days 0000385 Johnson Michael Truck Renfro Island 19.00 8/25/2008 Yes 10 Days 0000226 Johnston Jimmy H Mechanic Charolais Cleaton 21.00 1/1/2007 ,Yes 10 Days 0000105 Jones James W. Trackhoe Schoate KO 19.00 9/11/2006 Yes 10 Days 0000120 Jones Jewell W. Loader Schoate KO 19.50 8/29/2005 Yes 10 Days 0000260 Jones Jeffery W. Truck Schoate Briar Hill 18.00 3/12/2007 Yes 10 Days 0000394 Jones Michael L. Truck Schoate Winn North 18.00 1/19/2009 Yes 10 Days 0000270 Jones Jeff E. Truck Winn KO 18.00 4/16/2007 Yes 10 Days 0000360 Jones Jr. William D. Truck Schoate Briar Hill 18.00 7/21/2008 Yes 10 Days 0000349 Jordan Matthew Truck C&R Winn North 18.00 2/14/2005 Yes 10 Days 0000042 Kldd Dallas Loader Schoate Briar Hill 19.00 4/19/1999 Yes 10 Days 0000043 Kinkade James T. Truck Schoate Jessup 18.00 10/27/2005 Yes 10 Days 0000350 Kirtley Leslie Truck C&R Winn North 18.00 4/25/2005 Yes 10 Days 0000271 Larklns Marty Truck Schoate Radio Hill 18.00 4/16/2007 Yes 10 Days 0000351 Lear Steven E. Loader C&R KO 19.00 5/6/2002 Yes 10 Days 0000155 LeGrand James W Welder Schoate Briar Hill 21.00 1/1/2007 Yes 10 Days 0000044 Lindsey Charles R. Service Schoate Briar Hill 19.00 9/12/2002 Yes 10 Days 0000425 tinville Darren D. Mechanic Helper Schoate Radio Hill 21.00 6/8/2009 Yes 10 Days 0000431 LWIefleld Jack 0. Backhoe Winn KO 17.00 6/15/2009 Yes 10 Days 0000231 Locke Walter L Drill Winn Winn North 15.00 1/1/2007 Yes 10 Days 0000152 Lynn Linda D Purchasing Charolais Cleaton 18.00 1/1/2007 Yes 10 Days 0000121 Marks Russell Loader Renfro Jessup 19.50 10/8/2005 Yes 10 Days 0000244 Martin James L. Boat Pilot Phoenix Processing Island 65,500.00 1/1/2007 Yes 10 Days 0000246 Mason Jewell B. Service Winn K0 19.50 1/2/2007 Yes 10 Days 0000241 May Melissa L. PR Manager Phoenix Coal HQ 15.00 1/1/2007 10 Days 0000106 Maynard Thomas D. Mechanic C&R KO 22.00 9/11/2006 Yes 10 Days 0000361 McDowell Brian S. Dozer Schoate Radio Hill 19.00 7/21/2008 Yes 10 Days 0000404 McGowan Jr. Billy G. Mechanic Renfro Jessup 21.00 4/20/2009 Yes 10 Days 0000123 McPherson Anthony D. Prep Plant Operator Phoenix Processing Schoate Prep Plant 19.50 8/6/2005 Yes 10 Days 0000047 McRoy Terry R. Service Winn Winn North 20.00 7/10/2009 Yes 10 Days 0000426 Messamore Jason S. Mechanic Renfro Jessup 21.00 6/8/2009 Yes 10 Days 0000416 Miller Craig S. Truck Schoate Radio Hill 18.00 5/11/2009 Yes 10 Days |
APE Employee List Emp« Last Name First Name Job Title/Position Employer Current Work Location Pay Rate Annual/Hrly Hire Date Prod Bonus Vacation Date of Signed Employment Agreement 0000229 Mitchell Marvin E Foreman Winn KO 70,000.00 1/1/2007 Yes 10 Days 0000048 Morris Donald W. Backhoe Schoate Briar Hill 19.50 1/19/2004 Yes 10 Days 0000150 Nelson Johnny B Mechanic Charolais Cleaton 21.00 1/1/2007 Yes 10 Days 0000177 Newberry Andrew L Loader Schoate Wlnn North 19.00 1/1/2O07 Yes 10 Days 0000315 Nixon Mark A. Mechanic Wlnn Winn North 21.50 11/5/2007 Yes 10 Days 0000412 Noel Robert A. Loader Winn KO 19.00 5/4/2009 Yes 10 Days 0000050 Oakley Carlis L. Trackhoe Schoate Briar Hill 19.00 6/5/2006 Yes 10 Days 0000006 Parks Richard E Reg. Compliance Manager Phoenix Coal HQ 60,000.00 3/6/2006 10 Days 0000052 Patton BeauS. Prep Plant Operator Phoenix Processing Schoate Prep Plant 19.00 11/20/2006 Yes 10 Days 0000125 Patton Bruce Foreman Phoenix Processing Schoate Prep Plant 65,000.00 7/15/2005 Yes 10 Days 0000383 Payne Randall C. Dozer 5choate Briar Hill 19.50 9/2/2008 Yes 10 Days 0000306 Payton Adam W. Dozer Winn Winn North 19.50 10/8/2007 Yes 10 Days 0000179 Pennington Archie Dozer Schoate Radio Hill 19.00 1/1/2007 Yes 10 Days 0000278 Perry Hudson W. Backhoe Schoate Briar Hill . 19.50 4/30/2007 Yes 10 Days 0000398 Pharrls Kenneth D. Loader Schoate Briar Hill 19.00 2/16/2009 Yes 10 Days 0000364 Phelps Jeffrey H. Dozer Schoate Briar Hill 19.00 7/22/2008 Yes 10 Days 0000427 Phelps Jeremy A. Truck Schoate Briar Hill 15.00 6/8/2009 Yes 10 Days 0000007 Phillips GaryR Director of Human Resources Phoenix Coal HQ 95,000.00 10/24/2005 15 Days 0000209 Pierce Robert W General Manager Phoenix Processing Island 65,000.00 1/1/2007 Yes 10 Days 0000369 Plunkett Franklin D. Mechanic Schoate Radio Hill 21.00 8/4/2008 Yes 10 Days 0000301 Pool Jesse L Service Schoate Radio Hill 19.00 9/24/2007 Yes 10 Days 0000274 Porter Jason W. Truck Schoate Radio Hill 20.00 4/23/2007 Yes 10 Days 0000432 Powell Robert E. Prep Plant Operator Phoenix Processing Schoate Prep Plant 17.00 6/15/2009 Yes 10 Days 0000418 Rabe Mitchell W. Service Winn Winn North 21.00 5/11/2009 Yes 10 Days 0000057 Rager Ulburn L Dozer Schoate Briar Hill 19.50 3/1/1999 Yes 10 Days 0000352 Rager Tommy Welder C&R KO 20.00 11/15/2006 Yes 10 Days 0000341 Reynolds Randall L Truck Schoate Jessup 19.00 6/23/2008 Yes 10 Days 0000421 Reynolds William R. Dozer Schoate Briar Hill 19.00 6/8/2009 Yes 10 Days 0000060 Rhye Anthony R. Loader Schoate Briar Hill 19.00 1/3/2005 Yes 10 Days 0000233 Rickard Christopher L General Manager Winn KO 75,000.00 1/1/2007 Yes 10 Days 0000402 Robinson Jonathan S. Truck Schoate Briar Hill 17.00 3/30/2009 Yes 10 Days 0000151 Robinson Gerald B. Mechanic Charolais Cleaton 21.50 1/1/2007 Yes 10 Days 0000379 Rogers Jonathan L Foreman C&R KO 52,000.00 2/7/2001 10 Days 0000367 Ruddell William A. Truck C8>R Jessup 18.50 7/30/2008 Yes 10 Days 0000184 Rushing, Jr. Charles W General Manager Schoate Winn North 80,000.00 1/1/2007 Yes 10 Days 0000062 Scott Steven l___Dozer Schoate Briar Hill 19.50 6/19/2006 Yes 10 Days 0000063 Shain Ertest A. Mechanic Schoate Briar Hill 21.00 2/21/2005 Yes 10 Days 0000064 Shetton Shawn D. Truck Schoate Jessup 18.00 9/18/2006 Yes 10 Days 0000363 Shelton Archie W. Mechanic Schoate Briar Hill 21.00 7/23/2008 Yes 10 Days 0000089 Shepherd William Truck Wlnn KO 18.00 3/9/2006 Yes 10 Days 0000353 Shields MarkC. Mechanic C&R KO 21.00 8/1/2007 Yes 10 Days 0000208 Simms TroyL Crusher Operator Schoate Briar Hill 19.00 1/1/2007 Yes 10 Days |
APE Employee List Emp# last Name First Name Job Title/Position Employer Current Work Location Pay Rate Annual/Hrly Hire Date Prod Bonus Vacation Date of Signed Employment Agreement 0000442 Smith JanetL Account Staff Asst Phoenix Coal HQ 18,00 8/10/2009 10 Days 0000254 Smith Wendell R. Foreman Schoate Winn North 75,000.00 2/19/2007 Yes 10 Days 0000090 Smith Derek Dozer Winn Winn North 19.50 3/10/2004 Yes 10 Days 0000108 Smith Danny R. Loader Winn KO 20.00 4/6/2005 Yes 10 Days 0000091 Sparks Michael D. Truck Wlnn KO 18,00 8/6/2005 Yes 10 Days 0000439 Spurlin Jeffrey T. Dozer Winn KO 19.00 8/3/2009 Yes 10 Days 0000067 Stacer Billy Service Schoate Briar Hill 19.00 1/11/1999 Yes JO Days 0000068 Stalllns Ronald W. Loader C&R Winn North 19.00 4/18/2005 Yes 10 Days 0000293 Stanley RoyD. Loader Schoate Briar Hill 19.50 7/9/2007 Yes 10 Days 0000230 Stanley GlenG Backhoe Schoate Radio Htll 19.00 1/1/2007 Yes 10 Days 0000092 Stogner Bill Drill Winn KO 19.50 1/8/2004 Yes 10 Days 0000273 Stone Timothy W. Truck Schoate Radio Hill 18.00 4/23/2007 Yes 10 Days 0000093 Stone Ricky D. Service Winn KO 19.00 10/10/2006 Yes 10 Days 0000413 Storms Joshua D. Truck Winn Winn North 18.00 5/4/2009 Yes 10 Days 0000407 Storms David C. Dozer Renfro Winn North 19.00 4/27/2009 Yes 10 Days 0000433 Strader Adam D. Truck Renfro Jessup 17.00 6/15/2009 Yes 10 Days 0000009 Taylor Harold A Director of Safety Phoenix Coal Cleaton 65,000.00 8/22/2006 15 Days 0000440 Taylor Jason L. Mechanic Schoate Radio Hill 21.00 8/3/2009 Yes 10 Days 0000408 Terry Ricky A. Loader Schoate Radio Hill 19.00 4/27/2009 Yes 10 Days 0000317 Tlngtey Morris A. Dozer Charolais KO 22.00 11/5/2007 Yes 10 Days 0000285 Tinsley Eddie O. Drill Charolais Cleaton 20.00 6/13/2007 Yes 10 Days 0000250 Townsell Larry G. Dozer Renfro Jessup 20.00 1/29/2007 Yes 10 Days 0000070 Tucker Terry W. Truck Schoate Briar Hill 18.50 9/20/2002 Yes 10 Days 0000403 Utley Scottie R. Pumper Schoate Radio Hill 19.00 3/30/2009 Yes 10 Days 0000414 Vance Stanley R, Truck Wlnn Winn North 18.00 5/4/2009 Yes 10 Days 0000071 Vender Darrel B. Mechanic Helper Schoate Briar Hill 19.00 8/23/2004 Yes 10 Days 0000072 Vender JayW. Mechanic Schoate Briar Hill 21.00 10/18/1999 Yes 10 Days 0000073 Vender JohnP Maintenance Supervisor Schoate Briar Hill 75,000.00 1/25/1999 Yes 10 Days 0000075 Vincent GeneT Dozer Schoate Briar Hill 19.00 7/24/2006 Yes 10 Days 0000076 Ward Bryan A. Mechanic Helper Schoate Briar Hill 19.50 4/20/2005 Yes 10 Days 0000077 Ward Michael S. Loader Phoenix Processing Schoate Prep Plant 19.00 4/8/2002 Yes 10 Days 0000115 Wardlaw John M. Loader Charolais K0 20.00 7/28/2009 Yes 10 Days 0000382 Waters Thomas E. SVP of Sales Phoenix Coal Louisville 185,000.00 8/15/2008 20 Days 8/10/2008 0000111 Weaver GradyT. Grader C&R Winn North 19.50 2/16/2005 Yes 10 Days 0000368 West Dustln Truck Schoate Radio Hill 18.00 8/4/2008 Yes 10 Days 0000078 West Eddie D. Foreman Schoate Briar Hill 65,000.00 9/12/2002 Yes 10 Days 0000291 West Adam W. Dozer Winn KO 19.00 6/20/2007 Yes 10 Days 0000395 Westbrook CarlB. Dozer Schoate Radio Hill 19.00 1/19/2009 Yes 10 Days 0000372 Whitfield EricW. Drill Renfro Jessup 19.00 8/1/2008 Yes 10 Days 0000079 Whltten Kenny L Grader Schoate Briar Hill 19.00 4/28/2006 Yes 10 Days 0000375 Williams leroy Loader Renfro Jessup 19.00 8/1/2008 Yes 10 Days 0000081 Wilson Brlce L Dozer Schoate Briar Hill 20.00 7/15/2002 Yes 10 Days |
APE Employee List Emp# Last Name First Name Job Title/Position Employer Current Work Location Pay Rate Annual/Hrly Hire Date Prod Bonus Vacation Date of Signed Employment Agreement 0000400 Winters Tony D. Dozer C&R Wlnn North 19.00 2/23/2009 Yes 10 Days 0000157 Winton Jr. GradyL Welder Schoate Briar Hill 20.50 1/1/2007 Yes 10 Days 0000239j Woodruff William N Lab Manager Phoenix Processing Island 20.00 1/1/2007 Yes 10 Days 0000158 Woolsey James W. Welder Charolais Cleaton 20.50 1/1/2007 Yes 10 Days 0000011 Wooton Danny SVP of Ope rations Phoenix Coal HQ 200,000.00 10/11/2006 15 Days 10/1/2008 0000319 Wooton Kaberon K. VP of Mine Development Phoenix Coal HQ 115,000.00 11/26/2007 15 Days 0000096 Wynn Stan Dozer Winn KO 20.00 7/20/2006 Yes 10 Days 0000113 York James Truck Driver Charolais Qeaton 20.00 9/11/2006 Yes 10 Days |
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Kentucky Employed Mutual Insurance ___, Vi -1 A 250 West Main Street, Suite 900 FOJ.lCyxlO <ier Lexington, KY-40507 Claim Loss Run Detail Agunt: a Craig Kiddle Company Zsa Insured: Phoenix Coal Corporation SO BOX S4S, 121S tfebo Hd Ste A, Madiaonville, Kt, 42*31-0549 Madisonville, Si, 42431 Asa 0 t CiMan Location Claia ___, , . Seportad Sat* Claimants Sire Sate Status Medical Tivtiinm i tY Kxpenaa Total 1005 Highway 8X4 086195 09/20/2008 STACER, BILLY D pr/iflHn 154.63 0.00 54.70 209.31 Xne 09/20/2056 Ofi/OB/aoos IS4.63 0.00 S4.70 209.13 M Climbing up on traekhoe to service it. Servicing the traekhoe. Xnjuryed party was climbing 19 00 the traekhoe to service It when be Celt a pain ia his left shoulder and seek. 0.00 0.08 0.00 0.00 0.00 0.00 0.0Q 0.00 0.00 0.00 * 0.00 Suhco O.OO appo 100S Highway 814 086300 0S/23/20B8 RILKX, BRaDLBX E CLOSED 163.26 1949.£4 SB.80 2171.70 Xnc 09/25/2008 01/01/2007 163.26 1949.64 58.80 2171.70 Sd Stocking on dio Bulldozer Tracks. Rigging cables on D10 Bulldozer. Injuryed party was working on the DIO Bulldozer. When he got ready to dismount the dozer he stepped on a rock rolling bin right ankle. 0.00 0.00 0.00 0.00 0.00 0.00 0.00 O.OO 0.00 0.00 &*¦ 0.00 subro 0.00 appo 1005 Highway 814 083854 06/05/2008 BLUE, JOHH L OSES 7500.00 16128.51 726.05 243S4.56 Xnc 06/17/2008 04/09/2007 29S8.4B 1605.68 232.20 4796.36 M Driving 777 truck hauling rock out of pit. Driving 777 truck hauling rock out o£ pit. Injuryed party was hauling rock out of the pit when he ran over a hole , causing thr truck to Jam his lower hack. 4541.52 0.00 O.OO 14522.83 0.00 0.00 4S3.BS 0.00 0.00 19558.20 kaa 0.00 Suhro 0.00 appo |
Kentucky Employers* Mutual Insurance . , 250 West Main Street, Suite 900 POllCyftOXCi(C)!? Lexington, KY-40507 Claim Loss Run Detail Agent: J Crsig Riddle Company Inc Xnsuredi Phoenix Coal Corporation PO Scnc S43, 1215 Sebo Rd Ste K, H»diBQnvill , Kt, 42*31-0549 BadiSoovilla, KX. 42431 ec Due* claaa location Claim , .4 n,fc, Claimant Hire Date Status MMiesl ludeamity Kapense Total 1005 Highway 614 080840 01/31/3009 KYSN, STWI C CMSBD 0.00 0.00 0.00 0.00 lac 02/04/200S 07/01/2006 0.00 o.oo 0.00 O.OO M EE was climbing Cat EHR Boiex to start work When he slipped and Cell backwards onto his back. o.oo 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 Reg 0.00 Sidsro 0.00 appo 7309 £ Highway 814 087250 11/0S/ZOOB SHELTOtt, ARCHIE OWN 4000.00 0.00 100.00 41C0.00 Inc ii/07/aooi 07/23/2008 1391.18 D.00 48.90 1440.08 ra Putting transmission in mechanic truck. Patting transmission in mechanic truck. Party was putting a transmission In the mechanics truck using a. null cable to help lift Che trawtnisiom into place, the cable brake and the transmission tell striking the party on 2608.82 O.OO O.OO 0.0s 0.00 0.00 51.10 0.00 O.OO 2659.92 Res O.OO Sl»bro 0.00 appo 1005 Highway 814 098290 01/06/3009 HATCH, KORRIS A OTHR 2SO0.00 0.00 100.00 2600.00 lac 01/07/2009 01/01/1007 15S.42 0.00 57.60 213.02 M Climbing down off a Bulldotar. Climbing down off the Bulldozer. Injuryed party had just finished his shift when he climbed down off hia Bull closer. He turned back around to gat his hard hat when his feet ntuck in the mud causing hia injury. 2344.58 0.00 0.00 0.00 0.00 0.00 42.40 O.OO 0.00 2386.98 Res 0.00 Subrol 0.00 appo 1 100S Highway 814 088459 01/14/2009 DDN&AP, DKOHE R OPEB 2500.00 O.OO 100.00 2600.00 Ine ] 01/15/2009 07/23/2008 360. 4 0.00 51.80 412.44 Pd Putting a trunox ball in the back of a mechanic truck. Changing out a trunor ball on a bull dozer. Injuryed party was setting a trunor ball into the back of a mechanic truck when it slipped and fell an his left finger on his left hand. 2139.36 0.00 0.00 0.00 0.00 0.00 48.20 0.00 0.00 2187.56 Res 0.00 Subrol 0.00 appo | Print Date 03/10/09 11.-18:14 SM 1 1 Page IS Of 17 |
Kentucky Emptoycre Mutual Insurance 250 West Main Sttcet, Suite 900 Lexington, KY-40507 Policy-holder Claim Loss Run Detail Jkerenf. J Craig Riddle Company Inc twnmdi Phoenix Coal Corporation PO Box 549, 1215 Hebo Rd Ste A, MadlKonville, KX, 42431-0S49 Madisonville, KT, 42431 Ace Date Claimant Class looati CUlm ^^^^D.t. Hi^^t. ««*» Medical ladaanity Bcpeaea Total 3724 Highway 814 088652 01/23/3009 BR0M3D0B, JSRRT I OSES 2800.00 0.00 100.00 2600.00 oh 01/24/2009 07/09/2007 216.00 o.oo 48.90 264.90 Pd j Cleaning around « belt. Mien aecidant occurred injuryed party had cleaned around the belt, Re reached down to picfc up a piece of rock lying on the ground and his back went out. 2284.00 0.00 0.00 o.oo o.oo o.oo 51.10 O.OO 0.00 2125-10 K«S 0.00 Subro 0.00 appo 1005 Highway 814 009126 02/16/2009 OUTRE, CHRISTOPHER R OPBS 7S0.0O 0.00 100.00 850.00 Ine 02/17/2009 01/01/2007 0.00 0.00 0.00 0.00 Pd Trying to move the I-beam Working on a turn crusher I-beam was in place but did not suite the injuryed party. Re grabbed it and was trying to pull it a few inches whan he felt a pull in his chest and shoulder. 710.00 0.00 0.00 0.00 0.00 0.00 100.00 o.oo 0.00 850,00 mem 0.00 Snbro 0.00 appo Total For Policy Period 10/23/2001 10/23/2009 656.24 12250.00 2123.24 10126.76 0.00 0.00 o.oo 0.00 100.70 500.00 207.20 292.80 , Open Closed Total Had Only Claims 5 s Total Indemnity claims 0 0 Total Claims S 5 Total Paid For Cloned Total incurred For Open Total Paid For Cpon 756.94 12750.00 2330.44 10419.Se Total Reserve For Open Total Paid Closed * Total Incurred Open 12906.24 o.oo 600.70 13506.94 |
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Schedule 4.20(d) 8*109*50 PM . $essup&& = . . 7. waiver acres ill Sciioute 43iV- Kil.Gharolais- Star . ?i -P.&Q1 . Vaught 7 pRenfro Giebel II - .R&Q . Rose France Charpiais Vogtie North KDSMRE Expectedlssuance. v.- . Preparer 889-0146r4 McEwen 889-0134A3 HDR 889-0148 Marshall Miller 889-0149 McEwen 889-0130 j 5110 . ErMC2 889-0153 . wo ,, ErMC2 889-0137 2Q<1 BrlsSsfiMlillsIistiS Reviewer Joe Lydon West Johnson Darcie Jarman Tessa Monday Preliminary Application na 12408 applied 331 applied 318 8807 applied 329 Not Started Comp Application submitted 5722 submitted 325 submitted 522 apply 91 apply 815 submitted 528 Not Started Completeness Review AAA 6409 def itr recd 623 def Itr recd 617 Public Notice 610 709 Technical Review began 675 Tech Response partial tech Itr 729 2nd Tech Review tech Itr recd 820 Tech Response Cultural Resources arch done, bat done bat done, good bat done, good 1401 Status li Hiiiilii . »4 i)W3-.g od= . ..apply 815 i , ,,, <4Pp cat-~8 Preblast Survey Blasting Notice Corps of Engineers Preparer m&flffilflffllM LRL20081437-gjd *,r-vsri 3109-,- HDR LRL-2009-526-gjd J i x.lM15Q9 -.v on** , J>n201_1-. . WetlandMcEwen . 5110 i aesjaittSBaifBaasnjBBB HDR i1m Wetland Services HDR Wetland Services Reviewer George Delancey George DeLancey Rob Brown Delineation Status 101008 1215708 125708 121508 11408 71508 Delineation Confirmed 1016708 111708 JD letter applied 1121 applied 112008 404 Application Status applied 22 applied 417 apply 91 applied 618 Not Started Review period complete W&38&BBsx88&flx& Logging? Tech Response applied 219 2nd Tech Response submitted 5718 3rd4th Response submitted 76,722,727 Public Notice 320-418 Protested Sierra Club 418 Response to protest Mine License submitted 518 na 193 acre* liSiiiiia mmmmm ,. 54b acres Road Bonding Done Ground Control Plan |
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Phoenix Coal, Inc. 8262009 PHOENIX COAL INC. GENERAL BOND SUMMARY Schedule 4.20(e) Outstanding ** Company ProjectMine Permit No. Acres Bond Amount Black Diamond Resources, Inc. Coiltown 854-0243 265.5 $744,300 Black Diamond Resources, Inc. West Hopkins 854-0208 207.1 $278,200 Charolais Mining Company., LLC Graham #5 889-0136 512.6 $933,000 Crittenden County Coal, Inc. Tex No. 1 828-0002 205.7 $708,300 Crittenden County Coal, Inc. Providence No. 1 854-5038 496.8 $1,173,000 Phoenix Coal Processing, LLC Stoney Point 854-0253 115.3 $331,600 Pennyrile Coal Co., Inc. Fies Area 854-5026 71.8 $428,000 Phoenix Coal Processing, LLC River Queen Slurry 889-8004 0.0 $0 R&L Winn, Inc. Back In Black 889-0135 429.7 $1,205,400 Schoate Mining Co., LLC Briar Hill 889-0134 1,655.1 $3,164,100 Phoenix Coal Corporation K.O. Mine 889-0141 224.0 $654,200 Pact Resources, LLC Pratt Mine 917-5019 8.0 $35,400 Renfro Equipment Inc. Jessup Mine 889-0146 190.0 $771,300 CCC LC @ 1st United Bank Misc $103,500 Released June 2009 $0 Heritage Petroleum Misc $150,000 C & R Coal, Inc. B.C. South & Mud Pit 889-0150 413.6 $883,800 C & R Coal, Inc. Ebeneezer 889-0151 125.0 $317,500 C & R Coal, Inc. Beech Creek 889-0152 187.5 $443,800 TOTALS 5,107.7 $12,221,900 ** Standard Letters of Credit beneficiary is Commonwealth of Kentucky, Natural Resources Environmental Protection Cabinet Road Bond # Permit* County Bond Amt B8850237 02-02911508-07 Hopkins $50,000 B8850240 02-089175189-08 Muhlenberg $200,000 1208979 02-0621752693-09 Muhlenberg $300,000 B8850239 02-043150331-2008 McClean $200,000 |
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Schedule 4.22(a) Phoenix Coal Inc. Insurance Policies Summary 2009 Coverage Company Policy Date Policy Number Commercial Property American Resources 6809-6810 CFA0025004 Encroachment Bond Old Republic 51109-51110 1208979 Package (GL 8b Equipment) Chubb 5109-5110 35848860 Umbrella Chubb 5109-5110 79851274 401(k)Bond Cincinnati Insurance 31209-31212 B80991835 P & I (Tugboat) Inland Marine Underwriters 11009- 11010 N5JH60760 Directors & Officers Chubb 11108- 11109 8210-9136 Business Auto American Resources 11408- 11409 BAA0159103 Workers Compensation KEMI 102308 - 102309 359418 |
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1. | See attached. |
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Schedule 4.22 (c) Insurance Loss Runs Auto Coverage Effective Date 114 Current Policy Year Prior Year Prior Year -1 $0.00 $1,565.58 $0.00 Package, Gl* & EQ 51 $141.00 $52,128.00 $29,416.00 Umbrella 51 $0.00 $0.00 $0.00 Commercial Property 68 $0.00 $0.00 $0.00 Workers Comp 1023 $13,506.94 $43,193.32 $176,274.11 D&0,EPL,FL 1027 $0.00 $0.00 $0.00 P&l (Boat & Harbor) 110 $0.00 $0.00 $0.00 Pollution 51 $0.00 $0.00 $13,647.94 $96,886.90 $205,690.11 |
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Schedule 4.27 Top Five Customers Top Five Customers per Year 2008 2007 2006 Western Kentucky Energy X X X Louisville Gas & Electric X X Duke Energy Kentucky X X Duke Energy-Ohio X Tampa Electric X X X Kentucky Utilities X Renfro Equipment, Inc. X Coal Network, Inc. X Knight Hawk, LLC X |
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| Promptly following the Closing and in all events within seven (7) days after the Closing, in order to permit the Remaining Phoenix Entities to obtain the release and return to them following the Closing of the road bond listed on Schedule 2.1(b)(viii), the Buyer will post a substitute bond or other collateral with respect thereto which will enable the Remaining Phoenix Entities to obtain such release and return upon approval of such substituted bond or other collateral. |
| Promptly following the Closing Date, notify all Surface Mining Business customers (a) of the Acquisition Transaction and (b) that all payments related to any period after the Closing Date shall be made in accordance with payment and contact information to be designated by the Buyer. | ||
| Coordinate with the Buyer to provide/download all customer information and all open customer purchase orders for the Surface Mining Business as directed by the Buyer. |
| Promptly following the Closing Date, notify all Surface Mining Business vendors (a) of the Acquisition Transaction and (b) that all invoices related to any period after the Closing Date shall be made in accordance with the contact information to be designated by the Buyer. |
| As requested by the Buyer, assist with transfer of the following items to the extent permitted and as designated by the Buyer and/or provide information requested by the Buyer to allow the Buyer or the Acquired Company to establish similar arrangements for themselves: |
o | Utility accounts at the Cleaton shop and the surface mining sites | ||
o | Surface Mining Business telephone accounts (cell, data, land lines, etc.) | ||
o | Registration of titles to Fixed Assets (as applicable) |
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o | Wharfingers liability insurance | ||
o | Workers compensation insurance |
| Maintain the original manual and/or electronic copies of accounting and tax files related to the Surface Mining Business, including but not limited to accounts payable files, for all required statutory periods. Should the Sellers or their Affiliates cease operations or otherwise wish to dispose of the files, the Sellers shall notify the Buyer and arrange for the transfer of these files to the Buyer or as designated by the Buyer, at the expense of the Buyer. |
| With respect to any utility or other miscellaneous charges relating to the Surface Mining Business for time periods beginning before the Closing Date and ending after the Closing Date that are not expressly allocated between the Parties by the Acquisition Agreement or other agreements between the Parties and are not otherwise allocated by an arrangement mutually acceptable to the Sellers and the Buyer, the Sellers, on the one hand, and the Buyer and the Acquired Company, on the other hand, shall allocate each such charge between themselves on a prorated basis, with the prorated share of the Sellers to be based upon the percentage of the time period to which such charge relates that has expired as of the end of the Closing Date. The Party who receives any such charge directly or via one of its affiliates shall be obligated to calculate the allocation and provide the other Parties with sufficient detail to support the allocation calculations. |
| With respect to employees of the Phoenix Entities hired by the Buyer immediately following the Closing, the Sellers shall continue the employment thereof through the close of business on the Closing Date and, in connection with such employment, pay and furnish benefits to (or cause their Affiliates to pay and furnish benefits to) such employees in accordance with their standard payroll and benefit practices. In addition, the Sellers shall pay (or cause their Affiliates to pay) to such employees September production bonuses due them in accordance with the historical practices of the Sellers and their Affiliates. | ||
| The Sellers shall cause each Phoenix Entity who employed Surface Mining Business employees during 2009 to report the wages of each of its employees on IRS Form W-2 but no Phoenix Entity shall include on any such Form W-2 any of the wages paid by the Acquired Company or its Affiliates following the Closing (which the Buyer shall cause to be separately reported by the Acquired Company or its applicable Affiliates). |
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| The Sellers and the Buyer shall comply with the requirements of the attached document titled Post-Closing Action Items Regarding Completion of Pre-Closing Reorganization. |
| The consent to assignment of the Non-Competition Agreement dated July 31, 2008 by and among Phoenix Coal Corporation, Stuart K. Renfro and Robin R. Renfro shall not be required to be executed and delivered by the Closing and shall instead be pursued diligently and completed within a reasonable period of time by the Sellers at their expense following the Closing. |
| The abatement matters with respect to Citation #s 13-0027, 13-0029 and 13-0584 shall not be required to be completed by the Closing and shall instead be pursued diligently and completed within a reasonable period of time by the Sellers at their expense following the Closing. |
| The Sellers and the Buyer shall comply with the requirements of the Letter Agreement dated September 30, 2009 executed by the Buyer, the Sellers, and the Acquired Phoenix Entities executing thereon. |
| Notwithstanding anything to the contrary in the Acquisition Agreement, the parties will deal with the AT Technology Assets on a post-Closing basis as provided in the Transition Services Agreement. |
| Consents for assignment shall be pursued diligently and secured in a reasonable period of time by the Sellers at their expense following the Closing with respect to the Cooperative Agreement, dated May 27, 2009, by and between the Department of Highways, Transportation Cabinet, Commonwealth of Kentucky and Phoenix Coal Corporation. | ||
| Consents for assignment shall be pursued diligently by the Sellers at their expense following the Closing with respect to the following agreements: |
1. | Coal Supply Agreement, dated September 16, 2009, by and between American Coal Company and Charolais Coal Sales, LLC. |
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2. | Strip Coal Mining Lease, dated October 20, 1967, by and between Ayrshire Collieries Corporation and Sentry Royalty Company (assigned to Evergreen Mineral Co., Inc.). | ||
3. | Mineral Lease, dated December 4, 1947, by and between Ayershire Collieries Corporation and Talmage Rogers (assigned to Evergreen Mineral Co., Inc.). | ||
4. | Surface & Coal Lease Agreement, dated July 31, 2004, by and between R&L Winn, Inc. and Tom McDonald Heirs, et al. | ||
5. | Surface Mining Lease Agreement, dated July 31, 2004, by and between R&L Winn, Inc. and Billy & Patsy Kirtley | ||
6. | Coal Mining Lease Agreement, dated July 17, 2006, by and between R&L Winn, Inc. and Martha Rogers Haas, et al. | ||
7. | Coal Mining Lease, dated April 15, 2003, by and between R&L Winn, Inc. and Virginia Avaneil McDonald et al. | ||
8. | Surface Coal Mining Lease/Sublease Agreement, dated August 3, 2006, by and between Gerald A. & Judith Ann Liles, Joseph P. Liles and Renfro Equipment Inc. | ||
9. | Mineral Coal Mining Lease, dated September 13, 2006 by and between Gerald A. & Judith Ann Liles, Joseph P. Liles and Renfro Equipment Inc. |
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Specification A | Specification B | |||
Contract [*] | Contract Quantity | Contract Quantity | ||
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[*] (First Extended Term, if elected)
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Contract [*] | Specification A | Specification B | Specification C | |||||||||||||
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Specification A deliveries would
run through March [*], and
Specification C deliveries begin
April [*].
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Specification C deliveries would
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FOB Plant | ||||||||
Contract [*] | Specification A | Specification B | ||||||
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[*] per ton | [*] per ton | ||||||
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[*] per ton | [*] per ton | ||||||
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[*] (First Extended Term, if elected)
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[*] per ton | [*] per ton |
FOB Plant Rehobeth | ||||||||
Contract [*] | Specification A | Specification B | ||||||
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[*] (First Extended Term, if elected)
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[*] (Second Extended Term, if elected)
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[*] per ton | [*] per ton |
FOB Rail Cadiz | ||||||||
Contract [*] | Specification A | Specification B | ||||||
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(i) | it is duly organized, validly existing and in good standing under the laws of jurisdiction of its formation; |
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(ii) | it has all regulatory authorizations necessary for it to legally perform its obligations under this Agreement; | ||
(iii) | the execution, delivery and performance of this Agreement are within its powers, have been duly authorized by all necessary action and do not violate any of the terms and conditions in its governing documents, any contracts to which it is a party or any law, rule, regulation, order or the like applicable to it; | ||
(iv) | this Agreement and each other document executed and delivered in accordance with this Agreement constitutes its legally valid and binding obligation enforceable against it in accordance with its terms, subject to any equitable defenses; | ||
(v) | Buyer is acting as an agent for disclosed Parties, and Seller is acting for its own account; each Party has made its own independent decision to enter into this Agreement and as to whether this Agreement is appropriate or proper for it based upon its own judgment, is not relying upon the advice or recommendations of the other Party in so doing, and is capable of assessing the merits of and understanding, and understands and accepts, the terms, conditions and risks of this Agreement; | ||
(vi) | it is not bankrupt and there are no Bankruptcy Proceedings pending or being contemplated by it or, to its knowledge, threatened against it which would result in it being or becoming bankrupt; | ||
(vii) | there is not pending or, to its knowledge, threatened against it or any of its Affiliates any legal proceedings that could materially adversely affect its ability to perform its obligations under this Agreement; | ||
(viii) | no Event of Default with respect to it has occurred and is continuing and no such event or circumstance would occur as a result of its entering into or performing its obligations under this Agreement; | ||
(ix) | it is a forward contract merchant and this Agreement is a forward contract within the meaning of the United States Bankruptcy Code; | ||
(x) | it has entered into this Agreement in connection with the conduct of its business and it has the capacity or ability to make or take delivery of all Coal referred to in this Agreement; | ||
(xi) | with respect to this Agreement, it is an eligible contract participant as defined in Section 1a(12) of the Commodity Exchange Act, as amended [7USC § 1a(12)]; | ||
(xii) | all applicable information that is furnished in writing by it or on behalf of it to the other Party pursuant to this Agreement (as described on Schedule 10, attached hereto and hereby made a part of this Agreement) is as of the date provided true, accurate and complete in every material respect. For purposes of this representation, financial information provided via posting on the Internet shall be deemed to be written information provided to the other Party; | ||
(xiii) | no event or circumstance exists at any Approved Production Source (as provided under Schedule 3.1-B), that would constitute an event of Force Majeure under this Agreement. |
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a) | Title to and risk of loss of the Coal will pass to Buyer as the trucks are unloaded at the Designated Delivery Point. | ||
b) | Title to and risk of loss (except as provided in Schedule 2.4-B) of the Coal will pass to Buyer as the loaded railcars are pulled from the Designated Delivery Point. | ||
c) | Title shall revert back to Seller immediately upon any rejection by Buyer as provided elsewhere in this Agreement. |
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a) | the Settlement Amount that would be owed to the Non-Defaulting Party; plus | ||
b) | if the Non-Defaulting Party is Seller, the amount equal to aggregate of the amounts Seller is entitled to receive under this Agreement for Coal scheduled during the 60 day period preceding the Material Adverse Change (the amount of said Performance Assurance to be adjusted at the beginning of each subsequent quarter to reflect amounts then owing). |
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Weighted Average As-Received Basis | ||||||||
Contracted | Half Month (A)* | Applicable Lot (B)* | ||||||
Half-Month | Suspension Limit | Suspension Limit (D)* | ||||||
SPECIFICATION A:
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Calorific Value (Btu/lb.)
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[*] | [*] | [*] | |||||
Moisture (%)
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Ash (%)
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Volatile Matter (%)
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Hardgrove Grindability
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Sulfur Dioxide (lbs. S0
2
/MMBtu) (C)*
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[*] | [*] | [*] | |||||
Ash Fusion Temp. (H=1/2w) °F Red. Atm
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SPECIFICATION B:
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Calorific Value (Btu/lb.)
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Moisture (%)
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Ash (%)
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Volatile Matter (%)
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[*] | [*] | [*] | |||||
Hardgrove Grindability
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[*] | [*] | [*] | |||||
Sulfur Dioxide (lbs. S0
2
/MMBtu) (C)*
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Ash Fusion Temp. (H=1/2w) °F Red. Atm
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SPECIFICATION C:
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Calorific Value (Btu/lb.)
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[*] | [*] | [*] | |||||
Moisture (%)
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[*] | [*] | [*] | |||||
Ash (%)
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[*] | [*] | [*] | |||||
Volatile Matter (%)
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[*] | [*] | [*] | |||||
Hardgrove Grindability
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[*] | [*] | [*] | |||||
Sulfur Dioxide (lbs. S0
2
/MMBtu) (C)*
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[*] | [*] | [*] | |||||
Ash Fusion Temp. (H=1/2w) °F Red. Atm
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[*] | [*] | [*] | |||||
# Ash/MMBtu:
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[*] | [*] | [*] |
Definitions: | ||
N/A: Not Applicable | ||
(A) = | the Half-Month weighted average analysis result (as determined under Article VIII of this Agreement). | |
(B) = | the analysis result of the sample (or composite of samples, if more than one) representing each days unloading of Coal, or, at Buyers election, a composite of two or more such days unloadings (a days unloading shall mean all Coal unloaded on a given day between the hours of 12:01 a.m. to 12:00 a.m.). | |
(C) = | For the purpose of determining the pounds of sulfur dioxide per million Btu and pounds Ash per million Btu, the figures shall be rounded to the nearest one hundredth. For example, [*] pounds SO 2 per million Btu shall mean [*] pounds SO 2 per million Btu, while [*] pounds SO 2 per million Btu shall mean [*] pounds SO2 per million Btu and shall be deemed, for example, not to have met a [*] pounds SO 2 per million Btu specification. | |
(D) = | Buyer shall also have the right to reject any Coal that: 1) has a maximum topsize exceeding [*] when delivered to the Plant or exceeds [*] capable of passing a [*] square wire cloth sieve; 2) has a maximum topsize exceeding [*] if delivered to CCPP; 3) is not free flowing and free of extraneous material upon unloading; or 4) has intermediate sizes (including fines) added or removed. | |
(E) = | the suspension specification for grindability shall be no less than X, where X = Contracted Btu times [*], divided by the actual weighted average as-received calorific value of the coal for such lot. |
5/3/04 | 29 |
Coal | Ohio | |||||||||||
Mine | Reserves | Seam | County | |||||||||
Boswell
|
[*] | 8,9 | Belmont | |||||||||
Egypt Valley East
|
[*] | 9 | Belmont | |||||||||
Martin
|
[*] | 8 | Belmont/Harrison | |||||||||
Sexton
|
[*] | 8,8A,9 | Harrison | |||||||||
Daron
|
[*] | 8,8A,9 | Harrison | |||||||||
New Lexington
|
[*] | 5,6 | Perry | |||||||||
|
||||||||||||
Subtotal Strip 1
|
[*] | |||||||||||
|
||||||||||||
Plainfield II
|
[*] | 5,6 | Guernsey/Coshocton | |||||||||
Little Africa
|
[*] | 5,6 | Coshocton | |||||||||
Plainfield III
|
[*] | 5,6 | Guernsey/Coshocton | |||||||||
Otsego
|
[*] | 6 | Guernsey/Muskingum | |||||||||
Other Plainfield
|
[*] | 5,6 | Guernsey | |||||||||
Stonecreek
|
[*] | 5,6,7 | Tuscarawas | |||||||||
Stillwater
|
[*] | 7 | Tuscarawas | |||||||||
Miley
|
[*] | 6 | Coshocton | |||||||||
|
||||||||||||
Subtotal Strip 2
|
[*] |
Coal | Ohio | |||||||||||
Mine | Reserves | Seam | County | |||||||||
Seam | County | |||||||||||
Tusky #6
|
[*] | 6 | Tuscarawas/Harrison | |||||||||
Rush Twp #6
|
[*] | 6 | Tuscarawas | |||||||||
|
||||||||||||
Subtotal Underground
|
[*] | |||||||||||
|
||||||||||||
Grand Totals
|
[*] | 6 Seams | 7 Counties |
FOB Plant or | ||||||
FOB Railcar | ||||||
|
Cadiz Loadout | OPSL No. CUOH-10045 | ||||
|
Rehobeth Loadout | OPSL No. OSRR-1009 |
5/3/04 | 30 |
5/3/04 | 31 |
5/3/04 | 32 |
5/3/04 | 33 |
5/3/04 | 34 |
5/3/04 | 35 |
5/3/04 | 36 |
TABLE OF CONTENTS | Page No. | |||||
|
Preamble | 1 | ||||
|
Definitions | 1-5 | ||||
ARTICLE I
|
Term and Delivery Period | 5 | ||||
ARTICLE II
|
Obligations and Deliveries | 5 | ||||
Section 2.1
|
Contract Quantity
|
5 | ||||
Section 2.2
|
Reconsignment and/or Resale Rights
|
6 | ||||
Section 2.3
|
Scheduling
|
7 | ||||
Section 2.4
|
Delivery
|
7 | ||||
Section 2.5
|
Option(s) Exercise
|
7 | ||||
Section 2.6
|
Rejection and Suspension
|
7 | ||||
ARTICLE III
|
Quality Specifications | 8 | ||||
ARTICLE IV
|
Billing and Payment; Financial Reports | 9 | ||||
ARTICLE V
|
Contract Price | 10 | ||||
ARTICLE VI
|
Taxes and Other Liabilities | 10 | ||||
ARTICLE VII
|
Adjustments to the Contract Price (for Quality) | 12 | ||||
ARTICLE VIII
|
Weighing, Sampling, and Analysis | 12 | ||||
ARTICLE IX
|
Other Governmental Legislation, Regulations, and Orders | 12 | ||||
ARTICLE X
|
Representations | 13 | ||||
ARTICLE XI
|
Audit | 15 | ||||
ARTICLE XII
|
Force Majeure | 15 | ||||
ARTICLE XIII
|
Warranties | 16 | ||||
ARTICLE XIV
|
Title, Risk of Loss, and Indemnity | 16 | ||||
ARTICLE XV
|
Netting and Set Off | 17 | ||||
ARTICLE XVI
|
Calculation of Damages | 17 | ||||
ARTICLE XVII
|
Events of Default, Remedies and Limitation of Liabilities | 18 | ||||
ARTICLE XVIII
|
Grant of Security Interest | 19 | ||||
ARTICLE XIX
|
Holding and Using of Performance Assurance | 19 | ||||
ARTICLE XX
|
Early Termination Payment and Remedies | 20 | ||||
ARTICLE XXI
|
Successors, Assigns, and Assignment | 20 | ||||
ARTICLE XXII
|
Government Contractor Compliance Certificate | 21 | ||||
ARTICLE XXIII
|
Counterparts, Survival and Severability | 22 | ||||
ARTICLE XXIV
|
Expenses | 22 | ||||
ARTICLE XXV
|
Non-Waiver and Duty to Mitigate | 22 | ||||
ARTICLE XXVI
|
Addresses for Notices | 22 | ||||
ARTICLE XXVII
|
Confidentiality | 23 | ||||
ARTICLE XXVIII
|
Entire Agreement, Amendments, and Interpretation | 23 | ||||
ARTICLE XXIX
|
Governing Law; Waiver of Jury Trial | 24 | ||||
ARTICLE XXX
|
Venue | 24 | ||||
ARTICLE XXXI
|
Imaged Agreement | 24 | ||||
ARTICLE XXXII
|
Major Technological Improvements | 24 | ||||
Schedule 2.4
|
Transportation Specifications | 26-28 | ||||
Schedule 3.1-A
|
Quality Specifications | 29 | ||||
Schedule 3.1-B
|
Approved Prod Sources/Reserves/Des. Del. Point | 30 | ||||
Schedule 7.2
|
Quality Adjustments | 31-32 | ||||
Schedule 8.1
|
Weighing, Sampling, and Analysis | 33 | ||||
Schedule 10
|
List of Documents Provided | 35 |
5/3/04 | 37 |
Re:
|
Coal Supply Agreement No. 10-62-04-900, | |
|
dated as of May 21, 2004, between | |
|
Columbus Southern Power Company (Buyer), | |
|
and Oxford Mining Company (Seller) | |
|
||
|
Amendment No. 2004-1 |
OXFORD MINING COMPANY, INC. | ||||
|
||||
By:
|
/s/ Charles C. Ungurean | |||
|
|
|||
Title:
|
President | |||
|
|
Re: |
Coal Supply Agreement No. 10-62-04-900
dated as of May 21, 2004, between American Electric Power Service Corporation as agent for Columbus Southern Power Company (Buyer), and Oxford Mining Company, Inc. (Seller) |
|
Amendment No. 2005-1 |
1) | Article I paragraph two shall be deleted and restated as such: Provided this Agreement is still in effect, Buyer shall have the optional right, but not the obligation, to extend the term of this Agreement for [ * ] extensions, the first of which shall be referred to as the First Extended Term and shall begin [ * ] and end [ * ]. Should Buyer elect the First Extended Term, then a second [ * ] term extension shall become available and shall be referred to as the Second Extended Term and shall begin on [ * ] and end on [ * ]. Should Buyer elect the Second Extended Term, then a third [ * ] term extension shall become available and shall be referred to as the Third Extended Term and shall begin on [ * ] and end [ * ]. Each such election shall be referred to as an Option for Coal produced from reserves of Coal dedicated to this Agreement in Schedule 3.1-B hereof. | ||
2) | That Article II Section 2.1 paragraph one shall be amended by the addition of the following to the table set forth therein: |
Specification A | Specification B | |||||||
Contract | Contract | |||||||
Contract [ * ] | Quantity | Quantity | ||||||
[ * ] (Third Extended Term, if elected)
|
[*] | [*] |
3) | That Article II Section 2.1 paragraph four shall be deleted and restated as such: At such time, if any, that Buyer elects to purchase Specification C Coal, Buyer shall also have the option to elect to reduce purchases of Specification B Coal to [ * ] tons per [ * ]. The purchase of any revised quantities of Specification B Coal are to commence concurrently with the purchase of Specification C Coal and continue throughout the remaining Term, as set forth in Article I, of this Agreement, but not thereafter ( no later than [ * ] ). If Buyers election shall become effective during a Contract [ * ], then the quantities of Specifications A, B, and C Coal to be purchased and sold during such [ * ] shall be determined on a pro rata basis. | ||
4) | That Article II Section 2.1 paragraphs six and seven shall be deleted and restated as such: During each Contract [ * ] except for the Third Extended Term , if elected , Buyer shall have the right to increase the Contract Quantity for Specification A and/or Specification B Coal by [ * ] tons per half-year (January through June or July through December) (hereinafter the Half-Year Quantity Option) by notifying Seller of its election to take such Half-Year Quantity Option at least ninety (90) days prior to the beginning of the applicable half-year period. |
5) | That the Agreement shall be amended by inserting the following language between paragraphs three and four of Article IV: During the period March 1, 2005 through [ * ], Buyer shall deduct [ * ] from each Half-Month payment. For the billing period [ * ] through [ * ], Buyer shall deduct [ * ]. | ||
6) | That the Contract Price as set forth in Article V shall be amended as such: |
Contract Price | ||||
FOB Plant | ||||
Specification A | Specification B | |||
[ * ] - [ * ]
|
[ * ] per ton | [ * ] per ton | ||
[ * ] - [ * ]
|
[ * ] per ton | [ * ] per ton | ||
[ * ] - [ * ]
|
[ * ] per ton | [ * ] per ton | ||
[ * ] - [ * ]
|
[ * ] per ton | [ * ] per ton | ||
[ * ] - [ * ]
|
[ * ] per ton | [ * ] per ton | ||
[ * ] - [ * ]
|
[ * ] per ton | [ * ] per ton | ||
[ * ] - [ * ]
|
[ * ] per ton | [ * ] per ton | ||
[ * ] - [ * ]
|
[ * ] | [ * ] |
FOB Rail Rehobeth | ||||
Specification A | Specification B | |||
[ * ] - [ * ]
|
[ * ] per ton | [ * ] per ton | ||
[ * ] - [ * ]
|
[ * ] per ton | [ * ] per ton | ||
[ * ] - [ * ]
|
[ * ] per ton | [ * ] per ton | ||
[ * ] - [ * ]
|
[ * ] per ton | [ * ] per ton | ||
[ * ] - [ * ]
|
[ * ] per ton | [ * ] per ton | ||
[ * ] - [ * ]
|
[ * ] per ton | [ * ] per ton | ||
[ * ] - [ * ]
|
[ * ] per ton | [ * ] per ton | ||
[ * ] - [ * ]
|
[ * ] per ton | [ * ] per ton |
FOB Rail Cadiz | ||||
Specification A | Specification B | |||
[ * ] - [ * ]
|
[ * ] per ton | [ * ] per ton | ||
[ * ] - [ * ]
|
[ * ] per ton | [ * ] per ton | ||
[ * ] - [ * ]
|
[ * ] per ton | [ * ] per ton | ||
[ * ] - [ * ]
|
[ * ] per ton | [ * ] per ton | ||
[ * ] - [ * ]
|
[ * ] per ton | [ * ] per ton | ||
[ * ] - [ * ]
|
[ * ] per ton | [ * ] per ton | ||
[ * ] - [ * ]
|
[ * ] per ton | [ * ] per ton | ||
[ * ] - [ * ]
|
[ * ] per ton | [ * ] per ton |
* | Market shall mean a mutually agreed upon price established using local market indicators (including, but not limited to offers from 3rd party coal companies, brokers, relevant indexes, etc.) |
7) | That Article V paragraph three (3) shall be deleted and restated as such: Any Monthly Quantity Option tons or Half-Year Quantity Option tons, for Specification A and/or Specification B, elected as provided for under Article II, Section 2.1, shall be discounted by [ * ] per ton from the Contract Price in effect for the applicable specification(s) during calendar [ * ] and [ * ] per ton from the Contract Price in effect for the applicable specification(s) during the calendar [ * ], should the term be extended. | ||
8) | That in Schedule 7.2 Section (b)(i) and (c)(i) the definition of E shall be deleted and restated as such: E = the SO2 Monthly Price (or if not published, the average of the SO2 Daily Prices for the applicable calendar month of delivery) of allowances expressed in dollars per ton of SO2 in the table entitled AIR Daily Emission Allowance Indices published in AIR Daily, or its successor publication, for such calendar month of delivery as first published following such month multiplied by [ * ]. |
Oxford Mining Company, Inc. | ||||
|
||||
By:
|
/s/ Charles C. Ungurean | |||
|
|
|||
|
||||
Title:
|
President | |||
|
|
Re: |
Coal Supply Agreement No. 10-62-04-900, dated as of May 21, 2004,
as amended, between American Electric Power Service Corporation, as agent for Columbus Southern Power Company (Buyer), and Oxford Mining Company, Inc. (Seller) |
|
Amendment No. 2006-3 |
1) | The following definitions shall be added to Definitions: | |
Accrued Value means the total of: | ||
(a) for the period July [ * ], through December [ * ] and for each six calendar month period thereafter through December [ * ], (i) the difference between the Contract Price as of July [ * ], (the July [ * ] Contract Price) and the adjusted Contract Price as set forth under Article V, if accepted by Seller (the Adjusted Contract Price) for Specification A Coal (the Specification A Differential), multiplied the number of tons of Specification A Coal delivered, plus (ii) the difference between the July [ * ] Contract Price and the Adjusted Contract Price for Specification B Coal, if accepted by Seller (the Specification B Differential), for such period, multiplied by the number of tons of Specification B Coal delivered for such period if Seller elects to accept the Adjusted Contract Price. If Seller does not elect to accept the Adjusted Contract Price for any Half-Year, no Accrued Value shall apply. |
Contract [ * ] | Contract Quantity | Specification A Tons | Specification B Tons | |||
[*] [*]
|
[*] per [*] | [*] | (see below) | |||
[*] [*]
|
[*] per [*] | [*] | (see below) | |||
[*]01[*]
|
[*] per [*]* | [*] | (see below) | |||
[*] [*]
|
[*] per [*]* | (see below) | (see below) |
* | Buyer shall have the right (the Contract Option Right) to elect to increase the Contract Quantity from [*] Tons per [*] to [*] Tons per [*] for the period from [*], through [*], by providing written notice of such election to Seller no later than March [*]. |
Such tonnage shall be delivered ratably during each month of each Contract [*]. | ||
Buyer and Seller agree that the projected tonnage shortfall through [*] will be approximately [*] Tons of Coal. Buyer and Seller further agree that Buyer shall have the right but not the obligation to have such shortfall shipped at the rate of [*] Tons per month during any months through the Term of this Agreement by providing Seller thirty (30) days prior notice of such election. The Contract Price to be paid for such Coal shall be the Contract Price in effect when the shipment is made. | ||
For the Delivery Period from [*], through [*], Seller shall deliver, and Buyer shall accept, no less than [*] Tons per Contract [*] of Specification A Coal. |
The remaining coal to be delivered to Buyer shall consist of Specification B Coal. At any time upon thirty (30) days prior written notice to Seller during such Delivery Period, Buyer may elect to receive more than [*] Tons of Specification A Coal during any Contract [*], provided that the total Tons of Specification A and Specification B Coal shall equal the Contract Quantity, which Quantity may be increased at Buyers option, as provided below. | ||
For the Delivery Periods on or after [*], Buyer shall have the option to elect any percentage of the Contract Quantity to be delivered as Specification A or Specification B Coal with at least thirty (30) days prior notice to Seller, provided that the total Tons of Specification A and Specification B Coal shall equal the Contract Quantity, which Quantity may be increased at Buyers option, as provided below. | ||
Prior to Seller selling any washed Coal to a third party from a preparation plant that commences operation after [*], Buyer shall have the right of first refusal on the first [*] tons of washed Coal processed during any Contract [*] from such preparation plant at the price Seller would otherwise sell to a third party. Should Buyer elect to purchase the washed Coal, Sellers tonnage obligation under this Agreement shall be reduced by the amount of washed Coal that Seller delivers to Buyer. Such washed Coal shall meet the Specification C quality specifications as set forth on Schedule 3.1-A. | ||
During each Contract [*] through Contract [*], Buyer shall have the right to increase the Contract Quantity by [*] Tons per half-year, and during Contract [*] through [*], Buyer shall have the right to increase the Contract Quantity by [*] Tons ([*] Tons, if Buyer exercises its Contract Option Right) per half-year (January through June or July through December) (hereinafter the Half-Year Quantity Option) by notifying Seller of its election to take such Half-Year Quantity Option at least ninety (90) days prior to the beginning of the applicable Half-Year period. | ||
Additionally, Buyer shall have the right at any time, and from time to time, to increase its monthly quantity obligation for Specification A and/or Specification B Coal by up to [*] Tons (hereinafter the Monthly Quantity Option), and thus the Contract Quantity, at any time up to thirty (30) days prior to the beginning of the applicable delivery month. Such election shall remain in effect until such time as Buyer again gives at least thirty (30) days prior notice of a subsequent election to reduce the monthly quantity obligation to the minimum monthly quantity obligation. | ||
Each such election shall be referred to as an Option for Coal produced from reserves of Coal dedicated to this Agreement in Schedule 3.1-B hereof. | ||
4) | The Article V, Contract Price, shall be deleted in its entirety and replaced with the following: | |
(a) The Contract Price shall be as follows: |
For the first [*] tons per [*] | For tons in excess of [*] tons per [*] | |||||||
Contract Price | Contract Price | |||||||
FOB Plant | FOB Plant | |||||||
Specification A | Specification B | Specification A | Specification B | |||||
[*] [*]
|
[*] per ton | [*] per ton | [*] per ton | [*] per ton | ||||
[*] [*]
|
[*] Contract Price plus | [*] per ton | [*] Contract Price plus | [*] per ton | ||||
[*] [*]
|
[*] Contract Price plus | [*] per ton | [*] Contract Price plus | [*] per ton | ||||
[*] [*]
|
[*] Contract Price plus | [*] per ton | [*] Contract Price plus | [*] per ton | ||||
[*] [*]
|
[*] Contract Price plus | [*] per ton | [*] Contract Price plus | [*] per ton | ||||
[*] [*]
|
[*] /Ton | [*] /Ton | [*] /Ton | [*] /Ton |
Contract Price | Contract Price | |||||||
FOB Rail Rehobeth | FOB Rail Rehobeth | |||||||
Specification A | Specification B | Specification A | Specification B | |||||
[*] [*]
|
[*] per ton | [*] per ton | [*] per ton | [*] per ton | ||||
[*] [*]
|
[*] Contract Price plus | [*] per ton | [*] Contract Price plus | [*] per ton | ||||
[*] [*]
|
[*] Contract Price plus | [*] per ton | [*] Contract Price plus | [*] per ton | ||||
[*] [*]
|
[*] Contract Price plus | [*] per ton | [*] Contract Price plus | [*] per ton | ||||
[*] [*]
|
[*] Contract Price plus | [*] per ton | [*] Contract Price plus | [*] per ton | ||||
[*] [*]
|
[*] per ton | [*] per ton | [*] per ton | [*] per ton |
Contract Price | Contract Price | |||||||
FOB Rail Cadiz | FOB Rail Cadiz | |||||||
Specification A | Specification B | Specification A | Specification B | |||||
[*] [*]
|
[*] per ton | [*] per ton | [*] per ton | [*] per ton | ||||
[*] [*]
|
[*] Contract Price plus | [*] per ton | [*] Contract Price plus | [*] per ton | ||||
[*] [*]
|
[*] Contract Price plus | [*] per ton | [*] Contract Price plus | [*] per ton | ||||
[*] [*]
|
[*] Contract Price plus | [*] per ton | [*] Contract Price plus | [*] per ton | ||||
[*] [*]
|
[*] Contract Price plus | [*] per ton | [*] Contract Price plus | [*] per ton | ||||
[*] [*]
|
[*] per ton | [*] per ton | [*] per ton | [*] per ton |
(b) The Labor and Supplies Components (Labor shall be deemed to be inclusive of all benefits and related taxes) shall be adjusted effective [*] and [*] of [*] commencing July [*]. At such dates the average of the values of each of the respective indices correlative thereto (as set forth below) for the third, fourth, and fifth preceding months of such dates (i.e., August, September, and October for the January calculation) shall be compared to the average of the values of each of such respective indices for the ninth, tenth, and eleventh preceding months of such dates, and [*] of the respective percentage change (carried out four decimal places, e.g., 6.124% shall be 0.0612) in each of such average index values shall be multiplied by the last previously effective Component or Subcomponent amount of the Contract Price correlative thereto. The amounts per Ton of increase or decrease so obtained shall be added to or subtracted from, as the case may be, the last previously effective amount of such respective Component or Subcomponent, and the resulting amounts per Ton shall become the then effective amounts per Ton for such Components and Subcomponents. The resulting total of such Components and Subcomponents, on a per ton basis and after adjustments pursuant to this Article V, paragraph (b) shall be the Adjusted Contract Price. Seller shall have the right but not the obligation to elect to accept the Adjusted Contract Prices for each Contract Half-Year, in lieu of accepting the Contract Price. Should Seller elect to accept the Adjusted Contract Prices such Adjusted Contract Price shall be applicable to any Coal taken into account on and after the effective date of any such adjustment and shall remain in effect until the Contract Prices are again adjusted and/or elected pursuant to this Article. |
(i) | The indices utilized in calculations made pursuant to this Article shall be the indices as they are first published. In the event that the current base or any index referred to in this Article is converted to a new base, then conversion tables published by the U.S. Department of Labor, Bureau of Labor Statistics, or the U.S. Department of Commerce, as the case may be, shall be used in recomputing the level of any such index. Should publication of any index be discontinued, an index, which is as nearly as practicably equivalent, shall be substituted by mutual agreement of the parties hereto. |
(ii) | In the event that supervening events or circumstances shall render inapplicable any of the methods set forth in this Article for computing price adjustments hereunder, the parties hereto shall meet promptly to consider and agree upon new and revised methods appropriate to the circumstances then prevailing. | ||
(iii) | Seller and Buyer shall keep accurate up-to-date records and books of account showing all costs, payments, price revisions, credits, debits, weights, analyses, and all other data required of each of them for the purpose of administering this Agreement. | ||
Each time the price is revised in accordance with this Article, Seller shall furnish to Buyer a detailed statement (a claim) showing Sellers calculations of the price which should then be in effect under the provisions of this Agreement and whether Seller is electing the Adjusted Contract Prices as set forth in (b) above. | |||
Buyer shall make a preliminary review of the claim within a reasonable amount of time. Upon completion of Buyers preliminary review, Buyer may submit to Seller a letter explaining the differences, if any, in the price as shown on the claim and the price as determined by Buyers preliminary review. Buyer shall then submit a letter agreement to Seller for its countersignature to establish a tentative price adjustment The price adjustment as agreed to in the fully executed letter agreement, either a debit or credit, shall be processed using Buyers normal payment procedures and, if necessary, a tentative retroactive adjustment shall be made by payment to the party to whom such tentative adjustment is due. | |||
From time to time, representatives of Buyer shall audit Sellers claim(s) and recommend final price adjustments associated with such claim(s). Thereafter, Buyer shall submit a letter agreement to Seller for its countersignature to establish a final price adjustment. The price adjustment as agreed to in the fully executed letter agreement, either a debit or credit, shall be processed using Buyers normal payment procedures and, if necessary, a final retroactive adjustment shall be made by payment to the party to whom such final adjustment is due. | |||
(iiii) | Buyer and its designated representatives and/or agents including but not limited to its auditors, engineers, and geologists, shall at reasonable times, have access to the mine(s) producing coal under this Agreement, to all support facilities, and to all records pertaining to the coal reserves covered by this Agreement; to the production and cost of production records of coal produced at the production sources specified on Schedule 3.1-B; to all records related to the operation, maintenance, calibration, and testing (including bias testing) of the scales and/or samplers; and to all records pertaining to the costs of transportation hereunder (such access to such cost records shall be only as required for purposes of administering this Agreement). |
The amount of the respective Contract Prices effective as of July [*] allocated to each Component and Subcomponent thereof, and the index or method to be used for the adjustment of each such Component and Subcomponent, beginning July [*] are as follows: |
Initial Amount | ||||||||||
Per Ton of | ||||||||||
Component | Subcomponent | Contract Price | Index-Method | |||||||
1. Labor | (a) | [*] | CEU1021210006 Average Hourly Earnings Coal Mining published by the Bureau of Labor Statistics | |||||||
|
||||||||||
|
(b) | [*] | CWUROOOOSAM CPI-W Medical Care Index | |||||||
|
||||||||||
2. Supplies | (a) | [*] | Petroleum Products, Refined Code WPU057 | |||||||
|
(b) | [*] | Explosives WPU067902 | |||||||
|
(c) | [*] | PPI-Industrial Commodities WPUO3THRU15 | |||||||
|
(d) | [*] | Construction Machinery & Equipment WPU112 | |||||||
|
||||||||||
3. Per Ton Assessments | Shall be adjusted if change in law affecting Fee or Tax | |||||||||
|
||||||||||
(a) Federal Reclamation Fee | 0.350 | |||||||||
(b) Federal Black Lung Excise Tax | 0.550 | |||||||||
(c) Ohio Severance Tax | 0.090 | |||||||||
|
||||||||||
JULY 1, 2006 CONTRACT PRICE | [*] | |||||||||
|
Initial Amount | ||||||||||
Per Ton of | ||||||||||
Component | Subcomponent | Contract Price | Index-Method | |||||||
1. Labor | (a) | [*] | CEU1021210006 Average Hourly Earnings Coal Mining published by the Bureau of Labor Statistics | |||||||
|
(b) | [*] | CWUROOOOSAM CPI-W Medical Care Index | |||||||
|
||||||||||
2. Supplies | (a) | [*] | Petroleum Products, Refined Code WPU057 | |||||||
|
(b) | [*] | Explosives WPU067902 | |||||||
|
(c) | [*] | PPI-Industrial Commodities WPUO3THRU15 | |||||||
|
(d) | [*] | Construction Machinery & Equipment WPU112 | |||||||
|
||||||||||
3. Per Ton Assessments | Shall be adjusted if change in law affecting Fee or Tax | |||||||||
|
||||||||||
(a) Federal Reclamation Fee | 0.350 | |||||||||
(b) Federal Black Lung Excise Tax | 0.550 | |||||||||
(c) Ohio Severance Tax | 0.090 | |||||||||
|
||||||||||
JULY 1, 2006 CONTRACT PRICE | [*] | |||||||||
|
Initial Amount | ||||||||||
Per Ton of | ||||||||||
Component | Subcomponent | Contract Price | Index-Method | |||||||
1. Labor | (a) | [*] | CEU1021210006 Average Hourly Earnings Coal Mining published by the Bureau of Labor Statistics | |||||||
|
(b) | [*] | CWUROOOOSAM CPI-W Medical Care Index | |||||||
|
||||||||||
2. Supplies | (a) | [*] | Petroleum Products, Refined Code WPU057 | |||||||
|
(b) | [*] | Explosives WPU067902 | |||||||
|
(c) | [*] | PPI-Industrial Commodities WPUO3THRU15 | |||||||
|
(d) | [*] | Construction Machinery & Equipment WPU112 | |||||||
|
||||||||||
3. Per Ton Assessments | Shall be adjusted if change in law affecting Fee or Tax | |||||||||
|
||||||||||
(a) Federal Reclamation Fee | 0.350 | |||||||||
(b) Federal Black Lung Excise Tax | 0.550 | |||||||||
(c) Ohio Severance Tax | 0.090 | |||||||||
|
||||||||||
JULY 1, 2006 CONTRACT PRICE | [*] | |||||||||
|
Initial Amount | ||||||||||
Per Ton of | ||||||||||
Component | Subcomponent | Contract Price | Index-Method | |||||||
1. Labor | (a) | [*] | CEU1021210006 Average Hourly Earnings Coal Mining published by the Bureau of Labor Statistics | |||||||
|
(b) | [*] | CWUROOOOSAM CPI-W Medical Care Index | |||||||
|
||||||||||
2. Supplies | (a) | [*] | Petroleum Products, Refined Code WPU057 | |||||||
|
(b) | [*] | Explosives WPU067902 | |||||||
|
(c) | [*] | PPI-Industrial Commodities WPUO3THRU15 | |||||||
|
(d) | [*] | Construction Machinery & Equipment WPU112 | |||||||
|
||||||||||
3. Per Ton Assessments | Shall be adjusted if change in law affecting Fee or Tax | |||||||||
|
||||||||||
(a) Federal Reclamation Fee | 0.350 | |||||||||
(b) Federal Black Lung Excise Tax | 0.550 | |||||||||
(c) Ohio Severance Tax | 0.090 | |||||||||
|
||||||||||
JULY 1, 2006 CONTRACT PRICE | [*] | |||||||||
|
Initial Amount | ||||||||||
Per Ton of | ||||||||||
Component | Subcomponent | Contract Price | Index-Method | |||||||
1. Labor | (a) | [*] | CEU1021210006 Average Hourly Earnings Coal Mining published by the Bureau of Labor Statistics | |||||||
|
(b) | [*] | CWUROOOOSAM CPI-W Medical Care Index | |||||||
|
||||||||||
2. Supplies | (a) | [*] | Petroleum Products, Refined Code WPU057 | |||||||
|
(b) | [*] | Explosives WPU067902 | |||||||
|
(c) | [*] | PPI-Industrial Commodities WPUO3THRU15 | |||||||
|
(d) | [*] | Construction Machinery & Equipment WPU112 | |||||||
|
||||||||||
3. Per Ton Assessments | Shall be adjusted if change in law affecting Fee or Tax | |||||||||
|
||||||||||
(a) Federal Reclamation Fee | 0.350 | |||||||||
(b) Federal Black Lung Excise Tax | 0.550 | |||||||||
(c) Ohio Severance Tax | 0.090 | |||||||||
|
||||||||||
JULY 1, 2006 CONTRACT PRICE | [*] | |||||||||
|
Initial Amount | ||||||||||
Per Ton of | ||||||||||
Component | Subcomponent | Contract Price | Index-Method | |||||||
1. Labor | (a) | [*] | CEU1021210006 Average Hourly Earnings Coal Mining published by the Bureau of Labor Statistics | |||||||
|
(b) | [*] | CWUROOOOSAM CPI-W Medical Care Index | |||||||
|
||||||||||
2. Supplies | (a) | [*] | Petroleum Products, Refined Code WPU057 | |||||||
|
(b) | [*] | Explosives WPU067902 | |||||||
|
(c) | [*] | PPI-Industrial Commodities WPUO3THRU15 | |||||||
|
(d) | [*] | Construction Machinery & Equipment WPU112 | |||||||
|
||||||||||
3. Per Ton Assessments | Shall be adjusted if change in law affecting Fee or Tax | |||||||||
(a) Federal Reclamation Fee | 0.350 | |||||||||
(b) Federal Black Lung Excise Tax | 0.550 | |||||||||
(c) Ohio Severance Tax | 0.090 | |||||||||
|
||||||||||
JULY 1, 2006 CONTRACT PRICE | [*] | |||||||||
|
The Parties shall negotiate, in good faith, commencing no later than [ * ], on the Negotiated Prices for [*] tons per [*] and [*] tons per [*] as set forth in Article II, Section 2.1 to be applicable to the Specification A and Specification B Coal to be delivered under this Agreement during the period from [ * ], through [ * ]. If the Parties agree on such Negotiated Prices, then such |
Negotiated Prices, as adjusted pursuant to this Amendment, shall be in effect during such period. If, prior to March [*], the Parties are unable to reach agreement on the Negotiated Prices to be effective during such period, then not later than the first day of each month during the period from [*] through [*], Seller shall pay to Buyer [*] of the sum of Accrued Value Plus Interest. Except for such payment obligation, provided that Buyer and Seller have complied with this Agreement, then this Agreement shall terminate as of [*], without any further obligation of either Party. |
5) | Item (b)(i) and (c)(i) on Schedule 7.2, Quality Adjustments, shall be deleted in their entirety and replaced with the following in lieu thereof once FGD technology has been installed on Conesville Unit 4: | |
(b)(i) For Specifications A and C only, if the weighted average Half-Month SO2 content tested is greater than the SO2 Contracted Half-Month Weighted Average Specification, the Contract Price for Coal will be reduced by an amount determined in accordance with the following formula: | ||
((Actual lbs. SO2/mmbtu Contracted lbs. SO2/mmbtu)* Actual Btu/lb. * E * ([*] FGD Scrubber Efficiency Design Basis)) |
((Actual lbs. SO2/mmbtu Contracted lbs. SO2/mmbtu)* Contract Price * [*] * FGD Scrubber Efficiency Design Basis) | |||
(c)(i) For Specifications A and C only, if the weighted average Half-Month SO2 content tested is less than the SO2 Contracted Half-Month Weighted Average Specification, the Contract Price for Coal will be increased by an amount determined in accordance with the following formula: | |||
[((Contracted lbs. SO2/mmbtu Actual lbs. SO2/mmbtu)* Actual Btu/lb. * E * ([*] FGD Scrubber Efficiency Design Basis)) |
((Contracted lbs. SO2/mmbtu Actual lbs. SO2/mmbtu)* Contract Price * [*] * FGD Scrubber Efficiency Design Basis)]* [*] |
6) | The Ash specification for Specification B reflected in Schedule 3.1-A, Quality Specifications shall be amended to state as follows: |
Contracted | Half-Month (A)* | Applicable Lot (B)* | ||||||
Specification B | Half-Month | Suspension Limit | Suspension Limit (D)* | |||||
Ash (%)
|
[*] | [*] maximum | [*] maximum |
Acceptance Date: | 12/20/2006 | ||||||||
|
|||||||||
/s/ Charles E Zebula | |||||||||
Charles E Zebula | Oxford Mining Company, Inc. | ||||||||
AMERICAN ELECTRIC POWER
|
|||||||||
SERVICE CORPORATION, as Agent for
|
By: | /s/ Charles C. Ungurean | |||||||
Columbus Southern Power Company
|
Title: | President | |||||||
|
|||||||||
xc: W. E. Spiker Eagle Fuels, Inc.
|
. |
Re: |
Coal Purchase and Sale Agreement No. 10-62-04-900 dated as of May
21, 2004,
between American Electric Power Service Corporation, as agent for Columbus Southern Power Company (Buyer) and Oxford Mining Company, Inc. (Seller) and Buyers Right of First Refusal |
(a) | The Ownership Interest being offered to the third party; | ||
(b) | The form of transfer, whether sale, lease, exchange, or other transfer; | ||
(c) | The total consideration to be paid whether in the form of purchase price, lease payments, exchange property, assumption of obligations, or other consideration or benefits, and if all or a portion of the consideration is in other than cash, the fair market value of the non-cash consideration as determined by an independent investment banker or other appraiser recognized to be expert in making such valuations jointly selected by Buyer and Seller, or Shareholder, as applicable; | ||
(d) | The terms of payment including time table for payment and interest charges, if any; | ||
(e) | Security arrangements, if any, including without limitation, any mortgage, security interest, or third party guaranty to secure the payment of the consideration referred to in paragraph (c) above; and | ||
(f) | Any other material terms of the third party offer. |
By:
|
/s/ Charles C. Ungurean | |||
|
|
|||
|
||||
Its
|
President | |||
|
||||
|
||||
Thomas T. Ungurean (individually) | ||||
/s/ Thomas T. Ungurean
|
||||
|
||||
Charles C. Ungurean (individually)
|
||||
/s/ Charles C. Ungurean
|
||||
Re:
|
Coal Supply Agreement No. 10-62-04-900, dated as of May 21, 2004, as
amended, between American Electric Power Service Corporation, as agent for Columbus Southern Power Company (Buyer), and Oxford Mining Company, LLC (formerly Oxford Mining Company, Inc.) (Seller) (the Agreement) |
|
|
||
|
Amendment No. 2008-6 |
1) | Article I, Term and Delivery Period, shall be deleted in its entirety and replaced with the following in lieu thereof: | |
Article 1, Section 1 . The term of this Agreement (the Term also referenced herein as the Delivery Period) shall commence on the Effective Date, and shall remain in effect until [*], unless said Term is accelerated or extended as provided elsewhere in the Agreement. | ||
Article I, Section 2 . Provided this Agreement is still in effect, Buyer shall have the optional right, but not the obligation, to extend the Term of this Agreement for two [*] option periods, with the first option period beginning [*], and extending through [*], and the second beginning [*], and extending through [*]. Buyer shall provide Seller with Buyers notice of its exercising its election to extend the Term of the Agreement for the next option period at least 180 days prior to the commencement of the next option period. Should Buyer not elect to extend the Term of the Agreement for the first [*] option period, then the second [*] option period shall no longer be available. | ||
2) | Article II, Section 2.1, Contract Quantity, shall be deleted in its entirety and replaced with the following in lieu thereof: | |
Section 2.1 Contract Quantity . During the Delivery Period, Seller agrees to sell and deliver to Buyer and Buyer agrees to purchase and accept from Seller, FOB truck or railcar (as applicable) at the Designated Delivery Point, the quantity of Coal set forth herein. |
Contract [ * ] | Contract Quantity | Specification A Tons | Specification B Tons | |||
[*] - [*]
|
[*] per [*] | [*] | (see below) | |||
[*] - [*]
|
[*] per [*] | (see below) | (see below) | |||
[*]
|
[*] per [*] | (see below) | (see below) | |||
[*] - [*]
|
[*] per [*] | (see below) | (see below) |
For the Delivery Period from [*], through [*], Seller shall deliver, and Buyer shall accept, no less than [*] Tons per Contract [*] of Specification A Coal. Not less than one hundred eighty (180) days prior to each Contract [*] commencing with Contract [*], Buyer will notify Seller whether the Conesville Coal Preparation Plant will continue operating during the next Contract [*]. For each Contract [*] commencing with Contract [*] in which the Conesville Coal Preparation Plant continues operating, Buyer shall nominate a minimum of [*] Tons of Specification A Coal. The remaining Coal to be delivered to Buyer shall consist of Specification B Coal. Provided that the total Tons of Specification A and Specification B Coal shall equal the Contract Quantity, which Quantity may be increased at Buyers option, as provided herein, upon thirty (30) days prior written notice to Seller, Buyer may elect to receive (i) more than [*] Tons of Specification A Coal during any Contract [*] in which the Conesville Coal Preparation Plant is operating, or (ii) any number of Specification A and Specification B Tons of Coal during any Contract [*] in which the Conesville Coal Preparation Plant is not operating. | ||
Such tonnage shall be delivered ratably during each month of each Contract [*] unless otherwise agreed to by Buyer and Seller. | ||
Through November 2008, there was a tonnage shortfall of [*] Tons (inclusive of [*] force majeure Tons claimed by Seller during Contract [*]). Buyer shall have the right to increase deliveries in any month(s) by up to [*] Tons per month with thirty (30) days prior written notice until such time as the [*] Tons have been delivered. The Contract Price to be paid for such Coal shall be the Contract Price in effect when delivered. | ||
Prior to Seller selling any washed Coal to a third party from a preparation plant that commences operation after [*], Buyer shall have the right of first refusal to purchase the first [*] Tons of washed Coal processed during any Contract [*] from such preparation plant at the price Seller would otherwise sell to a third party (the First Refusal Price), provided that if Buyer elects to purchase such washed Coal, the Contract Price for such Coal shall be the First Refusal Price prior to [*], and thereafter the First Refusal Price less [*] per Ton. Should Buyer elect to purchase the washed Coal, Sellers tonnage obligation under this Agreement shall be reduced by the amount of washed Coal that Seller delivers to Buyer. Such washed Coal shall meet the Specification C quality specifications as set forth on Schedule 3.1-A. | ||
During each Contract [*] (including any option period[s] elected), Buyer shall have the right to increase the Contract Quantity by [*] Tons per half-year (January through June or July through December being a Contract Half-Year) (hereinafter the Half-Year Quantity Option) by notifying Seller of its election to take such Half-Year Quantity Option at least ninety (90) days prior to the beginning of the applicable Contract Half-Year. | ||
Additionally, for any month(s) through [*], Buyer shall have the right at any time, and from time to time, to increase its monthly quantity obligation (i.e. the Contract Quantity for the applicable Contract [*] divided by 12) for Specification A and/or Specification B Coal by up to [*] Tons (hereinafter the Monthly Quantity Option), and thus increase the Contract Quantity by up to [*] Tons per month, at any time prior to thirty (30) days prior to the beginning of the applicable delivery month. Such election shall remain in effect until such time as Buyer again gives at least thirty (30) days prior notice of a subsequent election to reduce the monthly quantity obligation by the amount of such increase. |
3) | The fourth paragraph of Article IV shall be deleted in its entirety and replaced with the following in lieu thereof: | |
For the first [*] Tons delivered beginning January 1, 2009 (and continuing until such time such amount is delivered), Seller shall deduct [*] per Ton to reimburse Buyer for Buyers prepayment to Seller in 2008 for Coal to be delivered in Contract [*]. | ||
4) | Article V, Contract Price, shall be deleted in its entirety and replaced with the following in lieu thereof: |
(a)The Contract Price shall be as follows and adjusted in accordance with Section (b) below: |
Contract Price FOB Plant (Per Ton) * | ||||||||
Specification A | Specification B | |||||||
[*]
|
[*] | [*] |
Contract Price FOB Rail Rehobeth (Per Ton) * | ||||||||
Specification A | Specification B | |||||||
[*]
|
[*] | [*] |
Contract Price FOB Rail Cadiz (Per Ton) * | ||||||||
Specification A | Specification B | |||||||
[*]
|
[*] | [*] |
* | For the first [*] Tons to be delivered pursuant to this Agreement in Contract [*], an amount of [*] per Ton shall be added to the Contract Price. |
(b) The Labor (Labor shall be deemed to be inclusive of all benefits and related taxes), Health Benefits, Petroleum Products Refined, Explosives, Construction Machinery & Equipment, Other, and Truck Transportation Cost Components shall be adjusted effective July 1 and January 1 of each Contract [*] commencing July [*]. At such dates the average of the values of each of the respective indices correlative thereto (as set forth below) for the third, fourth, and fifth preceding months of such dates (i.e., August, September, and October for the January calculation) shall be compared to the average of the values of each of such respective indices for the ninth, tenth, and eleventh preceding months of such dates, and [*] of the respective percentage change (carried out four decimal places, e.g., 6.124% shall be 0.0612) in each of such average index values shall be multiplied by the last previously effective Component amount of the Contract Price correlative thereto. The amounts per Ton of increase or decrease so obtained shall be added to or subtracted from, as the case may be, the last previously effective amount of such respective Component, and the resulting amounts per Ton shall become the then effective amounts per Ton for such Components of the Contract Price. | ||
The amount of the respective Base Prices effective as of [*] allocated to each Component thereof, and the index or method to be used for the adjustment of each such Component, beginning July [*]: |
Initial Amount Per Ton | ||||||||
Component | FOB Plant | FOB Rehobeth | FOB Cadiz | Index-Method | ||||
1. Labor
|
[*] | [*] | [*] | CEU1021210008 Average Hourly Earnings- Coal Mining | ||||
2. Health Benefits
|
[*] | [*] | [*] | CWUR0000SAM Medical Care | ||||
3. Petroleum Products Refined
|
[*] | [*] | [*] | WPU057 Petroleum Products Refined | ||||
4. Explosives
|
[*] | [*] | [*] | WPU067902 Explosives | ||||
5. Construction Machinery
|
[*] | [*] | [*] | WPU112 Construction Machinery & Equip. | ||||
6. Other
|
[*] | [*] | [*] | CUUR0000SA0 All Urban Consumers Adjusted in accordance with Article V, (c) | ||||
7. Per Ton Assessments
|
||||||||
Federal Reclamation Fee
|
0.315 | 0.315 | 0.315 | |||||
FBLET
|
0.550 | 0.550 | 0.550 | |||||
Ohio Severance Tax
|
0.252 | 0.252 | 0.252 | |||||
8. Changes in Law
|
0.000 | 0.000 | 0.000 | Adjusted in accordance with Article VI | ||||
|
||||||||
FOB Delivered Price
|
[*] | [*] | [*] | |||||
Truck Transportation Cost
|
[*] | [*] | [*] | PCU484 484 Truck Transportation | ||||
|
||||||||
January 1, 2009 Contract Price
|
[*] | [*] | [*] |
Initial Amount Per Ton | ||||||||
Component | FOB Plant | FOB Rehobeth | FOB Cadiz | Index-Method | ||||
1. Labor
|
[*] | [*] | [*] | CEU1021210008 Average Hourly Earnings- Coal Mining | ||||
2. Health Benefits
|
[*] | [*] | [*] | CWUR0000SAM Medical Care | ||||
3. Petroleum Products Refined
|
[*] | [*] | [*] | WPU057 Petroleum Products Refined | ||||
4. Explosives
|
[*] | [*] | [*] | WPU067902 Explosives | ||||
5. Construction Machinery
|
[*] | [*] | [*] | WPU112 Construction Machinery & Equip. | ||||
6. Other
|
[*] | [*] | [*] | CUUR0000SA0 All Urban Consumers Adjusted in accordance with Article V, (c) | ||||
7. Per Ton Assessments
|
||||||||
Federal Reclamation Fee
|
0.315 | 0.315 | 0.315 | |||||
FBLET
|
0.550 | 0.550 | 0.550 | |||||
Ohio Severance Tax
|
0.252 | 0.252 | 0.252 | |||||
8. Changes in Law
|
0.000 | 0.000 | 0.000 | Adjusted in accordance with Article VI | ||||
|
||||||||
FOB Delivered Price
|
[*] | [*] | [*] | |||||
Truck Transportation Cost
|
[*] | [*] | [*] | PCU484 484 Truck Transportation | ||||
|
||||||||
January 1, 2009 Contract Price
|
[*] | [*] | [*] |
(i) The indices utilized in calculations made pursuant to this Article shall be the indices as they are first published. In the event that the current base or any index referred to in this Article is converted to a new base, then conversion tables published by the U.S. Department of Labor, Bureau of Labor Statistics, shall be used in recomputing the level of any such index. Should publication of any index be discontinued, an index, which is as nearly as practicably equivalent, shall be substituted by mutual agreement of the Parties hereto. | ||
(ii) Seller and Buyer shall keep accurate up-to-date records and books of account showing all costs, payments, price revisions, credits, debits, weights, analyses, and all other data required of each of them for the purpose of administering this Agreement. |
Each time the price is revised in accordance with this Article, Seller shall furnish to Buyer a detailed statement (a claim) showing Sellers calculations of the price which should then be in effect under the provisions of this Agreement. | ||
Buyer shall make a preliminary review of the claim within a reasonable amount of time. Upon completion of Buyers preliminary review, Buyer may submit to Seller a letter explaining the differences, if any, in the price as shown on the claim and the price as determined by Buyers preliminary review. Buyer shall then submit a letter agreement to Seller for its countersignature to establish a tentative price adjustment. The price adjustment as agreed to in the fully executed letter agreement, either a debit or credit, shall be processed using Buyers normal payment procedures and, if necessary, a tentative retroactive adjustment shall be made by payment to the Party to whom such tentative adjustment is due. | ||
From time to time, representatives of Buyer shall audit Sellers claim(s) and recommend final price adjustments associated with such claim(s). Thereafter, Buyer shall submit a letter agreement to Seller for its countersignature to establish a final price adjustment. The price adjustment as agreed to in the fully executed letter agreement, either a debit or credit, shall be processed using Buyers normal payment procedures and, if necessary, a final retroactive adjustment shall be made by payment to the Party to whom such final adjustment is due. | ||
(iii) For each option period elected, Buyer and Seller shall negotiate the market prices FOB Plant for Specification A and Specification B Coal. In the event that Buyer and Seller are unable to agree upon such market prices within thirty (30) days after Buyers notification to Seller of its election to exercise an option, Buyer and Seller shall agree to be bound through arbitration. The arbitration shall be held in Columbus, Ohio, before a single arbitrator in accordance with the procedures of the American Arbitration Association (AAA) rules. To be qualified, the arbitrator must have at least ten (10) years extensive experience in the buying or selling of Eastern Coal. There shall be no ex parte communication with the arbitrator. Each Party shall submit to the arbitrator their calculation of the market prices FOB Plant for Specification A and Specification B Coal (as further defined in Schedule 3.1-A) for the option period, along with any supporting documentation. The arbitrator shall be required to select either the Buyers or the Sellers calculation of the market prices for the applicable option period. Once such market prices have been determined, either by agreement or through arbitration, the Contract Prices during the applicable option period shall be such market prices less [*] per Ton. The Parties shall then within thirty (30) days after such determination, determine the Contract Prices FOB Rail Rehobeth and FOB Rail Cadiz based upon the determined market prices for Specification A and Specification B Coal FOB Plant. | ||
(iv)Buyer and its designated representatives and/or agents including but not limited to its auditors, engineers, and geologists, shall at reasonable times, have access to the mine(s) producing Coal under this Agreement, to all support facilities, and to all records pertaining to this Agreement (including but not limited to records pertaining to the Coal reserves); to the production and cost of production records of Coal produced at the production sources specified on Schedule 3.1-B; to all records related to the operation, maintenance, calibration, and testing (including bias testing) of the scales and/or samplers; and to all records pertaining to the costs of transportation hereunder (such access to such cost records shall be only as required for purposes of administering this Agreement). | ||
(c) Assessments The Contract Price shall be adjusted for changes in the assessment rate to Seller for Federal Reclamation Fee, Federal Black Lung Excise Tax and Ohio Severance Tax. Any adjustment to the Contract Prices for changes in assessments shall be effective on the first day of the calendar month following the effective date of any change occurring after [*] (except when such change is effective on the first day of a month in which case such adjustment shall be effective as of such date). Such amounts shall be adjusted for any related tax credits allowed Seller. For the purpose of calculating price adjustments under this section (c), all adjustments shall be deemed to be based on those assessments applicable to surface mining. |
Buyer and Seller acknowledge that Seller currently takes a deduction for moisture content in excess of inherent moisture when making Federal Reclamation Fee and Federal Black Lung Excise Tax payments for Coal. | ||
5) The second paragraph of Article VI, Section 6.2, Changes in Law, shall be deleted and the following substituted in lieu thereof: | ||
In the event of the enactment, modification, or revision of any Federal, State or local legislation, regulations, rules or mandates issued pursuant thereto, including but not limited to the Federal Mine Safety & Health Act of 1977 and the Surface Mining Control and Reclamation Act of 1977, after [*], which affect the bituminous coal industry with respect to the coal reclamation, conservation, environmental protection, mine safety, mine working conditions and practices, ventilation, health, employee retirement programs occupational hazards, research and reclamation and conservation of mined areas, and which increases or decreases Sellers cost of producing Coal under this Agreement, an appropriate adjustment will be made to the current Contract Price to recognize such changed cost; provided, however, there shall be no changes made in the Contract Price for changed costs associated with labor related benefits or taxes, real or personal property taxes, corporate net income or franchise taxes; and further provided that Buyer shall have the right to terminate this Agreement should any such adjustments cause the Contract Price to be increased by more than [*] of its then current amount or should the total of all such adjustments under this Section 6.2 cause the Contract Price to be increased by more than [*] of its initial amount as of [*]. | ||
6) Commencing [*], Buyer and Seller agree that should Sellers cumulative shortfall in deliveries be at least [*] Tons as of the end of any Contract Half Year, the first Tons shipped thereafter shall be deemed to be such shortfall Tons and the Contract Price for such Tons shall be reduced by [*] per Ton. This reduction is in addition to any other rights that Buyer may have under the Agreement or at law or in equity relative to any tonnage shortfall. |
|
Acceptance Date: 12/29/08 | |||
|
/s/ Timothy K. Light | ||||||
Timothy K. Light | Oxford Mining Company, Inc. | |||||
Vice President
|
||||||
Columbus Southern Power Company
|
By: | /s/ Jeffrey M. Gutman | ||||
|
||||||
|
Title: | SVP & CEO | ||||
|
Fuel Supply agreement between American Electric Power Service Corporation, as agent for Columbus Southern Power Company and Oxford Mining Company, LLC, fka Oxford Mining Company originally executed May 21, 2004 as amended, contract #10-62-04-900 | |||
The undersigned Charles C. Ungurean, President and Chief Executive Officer of OXFORD MINING COMPANY, LLC (Oxford) hereby delegates to Jeff Gutman, Senior Vice President and Chief Financial Officer of Oxford the authority to execute an amendment to the above referred contract on or before December 31, 2008. | |||
This delegation authorizes Mr. Gutman to act in my name and stead to agree and comit to the terms and conditions of the amendment on behalf of Oxford. |
Attest: | /s/ Linda Whitis |
Linda Whitis, Assistant Secretary
Oxford Mining Company, LLC |
Re:
|
Coal Supply Agreement No. 10-62-04-900, dated as of May 21, 2004, as | |
|
amended, between American Electric Power Service Corporation, as agent | |
|
for Columbus Southern Power Company (Buyer), and Oxford Mining | |
|
Company, LLC (formerly Oxford Mining Company, Inc.) (Seller) | |
|
(the Agreement) | |
|
||
|
Amendment No. 2009-1 |
1) | Section 2.1, Contract Quantity, of Article II, Obligations and Deliveries, shall be deleted in its entirety and replaced with the following in lieu thereof: |
Contract [*] | Contract Quantity | Specification A Tons | Specification B Tons | |||||||||
[*]
|
[*] per [*] | [*] | (see below) | |||||||||
[*] - [*]
|
[*] per [*] | [*] | (see below) | |||||||||
[*] - [*]
|
[*] per [*] | (see below) | (see below) | |||||||||
[*]
|
[*] per [*] | (see below) | (see below) | |||||||||
[*] - [*]
|
[*] per [*] | (see below) | (see below) |
2) | For the period May [*] through [*], the following quality specifications for Specification A reflected in Schedule 3.1-A, Quality Specifications shall be amended as follows: |
Weighted Average As-Received Basis | ||||||||||||
Contracted | Half-Month (A) * | Applicable Lot (B) * | ||||||||||
SPECIFICATION A: | Half-Month | Suspension Limit | Suspension Limit (D)* | |||||||||
Calorific Value (Btu/lb.)
|
[*] | [*] minimum | [*] minimum | |||||||||
Ash (%)
|
[*] | [*] maximum | [*] maximum | |||||||||
Sulfur Dioxide (lbs.
SO2/MMBtu) (C)*
|
[*] | [*] maximum | [*] maximum |
Very truly yours,
|
||
/s/
James D.
Henry
|
||
James D. Henry
|
Acceptance Date: June 11, 2009 | |
Vice President Fuel Procurement East
|
||
AMERICAN ELECTRIC POWER
|
Oxford Mining Company, LLC | |
SERVICE CORPORATION, as agent for
|
||
Columbus Southern Power Company
|
||
|
By: /s/ Charles C.
Ungurean
|
|
|
||
|
Its: President &
CEO
|
|
|
||
xc: W. E. Spiker Eagle Fuels, Inc.
|
Re:
|
Coal Purchase and Sale Agreement No. 10-62-04-900, dated as of | |
|
May 21, 2004, as amended, between American Electric Power | |
|
Service Corporation, as agent for Columbus Southern Power | |
|
Company (Buyer), and Oxford Mining Company, Inc. (Seller) | |
|
||
|
Amendment No. 2009-3 |
1) | The fourth paragraph in Section 2.1, Contract Quantity, of Article II, Obligations and Deliveries, shall be deleted and replaced with the following in lieu thereof: | |
Through November 2008, there was a tonnage shortfall of [*] Tons (inclusive of [*] force majeure Tons claimed by Seller during Contract [ * ]). The shortfall has subsequently been reduced by [*] tons delivered by Seller in the months of January, February, and October 2009. The parties have agreed to an additional shortfall tonnage reduction in 2009, for a remaining shortfall total of [*] Tons. Buyer shall have the right to increase deliveries in any month(s) by up to [*] Tons per month with thirty (30) days prior written notice until such time as the [*] Tons have been delivered. The Contract Price to be paid for such Coal shall be the Contract Price in effect when delivered. | ||
2) | Delete the first paragraph in Article V, subsection (b) in its entirety and replace it with the following in lieu thereof: | |
(b) The Labor (Labor shall be deemed to be inclusive of all benefits and related taxes), Health Benefits, Construction Machinery & Equipment, Other, and Truck Transportation Cost Components shall be adjusted effective July 1 and January 1 of each Contract [ * ] commencing July 1, 2009. At such dates the average of the values of each of the respective indices correlative thereto (as set forth below) for the third, fourth, and fifth preceding months of such dates (i.e., August, September, and October for the January calculation) shall be compared to the average of the values of each of such respective indices for the ninth, tenth, and eleventh preceding months of such dates. The Petroleum Products Refined Cost Component shall be adjusted effective |
January 1, April 1, July 1 and October 1 of each Contract [*] beginning in April 2010. At such dates the Petroleum Products Refined Cost Component, for the third, fourth, and fifth preceding months of such dates (i.e., August, September, and October for the January calculation) shall be compared to the average values of the sixth, seventh and eighth preceding months of such dates. | ||
[*] of the respective percentage change (carried out four decimal places, e.g., 6.124% shall be 0.0612) in each of such average index values shall be multiplied by the last previously effective Component amount of the Contract Price correlative thereto. The amounts per Ton of increase or decrease, either by quarterly or semi-annual adjustment, so obtained shall be added to or subtracted from, as the case may be, the last previously effective amount of such respective Component, and the resulting amounts per Ton shall become the then effective amounts per Ton for such Components of the Contract Price. | ||
3) | For the period [*] through [*], the following quality specifications for Specification A reflected in Schedule 3.1-A, Quality Specifications shall be amended as follows: |
Weighted Average As-Received Basis | ||||||||||||
Contracted | Half-Month (A)* | Applicable Lot (B)* | ||||||||||
SPECIFICATION A: | Half-Month | Suspension Limit | Suspension Limit (D)* | |||||||||
Caloric Value (Btu/lb.)
|
[*] | [*] minimum | [*] minimum | |||||||||
Ash (%)
|
[*] | [*] maximum | [*] maximum | |||||||||
Sulfur Dioxide (lbs.
SO2/MMBtu( (C)*
|
[*] | [*] maximum | [*] maximum |
Acceptance Date:
|
||
|
||
Oxford Mining Company, LLC
|
||
|
||
/s/
Thomas T. Ungurean
|
||
Signature
|
||
|
||
Thomas T. Ungurean
|
||
Name (Print)
|
||
|
||
Vice
President
|
||
Title
|
||
|
||
xc: W. E. Spiker Eagle Fuels, Inc.
|
Re:
|
Coal Purchase and Sale Agreement No. 10-62-04-900, dated | |
|
as of May 21, 2004, as amended, between American Electric | |
|
Power Service Corporation, as agent for Columbus Southern | |
|
Power Company (Buyer), and Oxford Mining Company, Inc. (Seller) | |
|
||
|
Amendment No. 2010-1 |
1) | The fourth paragraph in Section 2.1, Contract Quantity, of Article II, Obligations and Deliveries, shall be deleted and replaced with the following in lieu thereof: | |
Through November 2008, there was a tonnage shortfall of [ * ] Tons (inclusive of [ * ] force majeure Tons claimed by Seller during Contract [ * ]). The shortfall has subsequently been reduced by [ * ] tons delivered by Seller in the months of January, February, and October 2009. The parties have agreed to an additional shortfall tonnage reduction in 2009, for a remaining shortfall total of [ * ] Tons. Buyer shall have the right to increase deliveries in any month(s) by up to [ * ] Tons per month with thirty (30) days prior written notice until such time as the [ * ] Tons have been delivered. The Contract Price to be paid for such Coal shall be the Contract Price in effect when delivered. | ||
2) | In accordance with Article XXVI, NOTICES , Sellers address shall be amended as follows: | |
For Notices:
If to Seller : Attn: Ms. Angela Ashcraft, Supervisor, Commercial Analysis Oxford Mining, LLC 544 Chestnut Street P. O. Box 427 Coshocton, OH 43812 Phone: 740-622-6302 Fax: 740-623-0365 |
By USPS mail a copy to:
|
By UPS or FEDX overnight mail a copy to: | |
William E. Spiker
|
William E. Spiker | |
Eagle Fuels, Inc.
|
Eagle Fuels, Inc. | |
P. O. Box 291
|
Suite 220 | |
Cadiz, OH 43907
|
153 East Main St. | |
Phone: 740-942-8181 Fax: 740-942-4227
|
Columbus, OH 43215 |
Acceptance
Date: 1/19/10
|
||
|
||
Oxford Mining Company, LLC
|
||
|
||
/s/
Chuck
Ungurean
|
||
Signature
|
||
|
||
|
||
Chuck
Ungurean
|
||
Name (Print)
|
||
|
||
President
& CEO
|
||
Title
|
||
|
||
xc: W. E. Spiker Eagle Fuels, Inc.
|
Re:
|
Coal Purchase and Sale Agreement No. 10-62-04-900,
dated as of May 21, 2004, as amended, between American Electric Power Service Corporation, as agent for Columbus Southern Power Company (Buyer), and Oxford Mining Company, Inc. (Seller) |
|
|
||
|
Amendment No. 2010-2 |
Acceptance Date: 2/11/10
|
||||
|
|
|||
Oxford Mining Company, LLC | ||||
|
|
|||
/s/ Charles C. Ungurean | ||||
Signature | ||||
|
|
|||
Charles C. Ungurean | ||||
Name (Print) | ||||
|
|
|||
President & CEO | ||||
Title | ||||
|
|
|||
xc: W. E. Spiker Eagle Fuels, Inc. |
Tentative | Tentative | Tentative | ||||||||||
Contract Price (1) | Adjustments | Contract Price | ||||||||||
Cost Component | 07/01/09 | 01/01/10 | 01/01/10 | |||||||||
Labor
|
[ * ] | [ * ] | [ * ] | |||||||||
Health Benefits
|
[ * ] | [ * ] | [ * ] | |||||||||
Petroleum Products Refined
|
[ * ] | [ * ] | [ * ] | |||||||||
Explosives
|
[ * ] | [ * ] | [ * ] | |||||||||
Construction Machinery
|
[ * ] | [ * ] | [ * ] | |||||||||
Other
|
[ * ] | [ * ] | [ * ] | |||||||||
Per Ton Assessments
|
||||||||||||
Federal Reclamation Fee
|
0.315 | 0.000 | 0.315 | |||||||||
FBLET
|
0.550 | 0.000 | 0.550 | |||||||||
Ohio Severance Tax
|
0.252 | 0.020 | 0.272 | |||||||||
Changes in Law
|
0.000 | 0.000 | 0.000 | |||||||||
|
||||||||||||
FOB Delivered Price
|
[ * ] | [ * ] | [ * ] | |||||||||
Truck Transportation Cost
|
[ * ] | [ * ] | [ * ] | |||||||||
|
||||||||||||
TOTAL CONTRACT PRICE (2)- Spec A
|
[ * ] | [ * ] | [ * ] |
Tentative | Tentative | Tentative | ||||||||||
Contract Price (1) | Adjustments | Contract Price | ||||||||||
Cost Component | 07/01/09 | 01/01/10 | 01/01/10 | |||||||||
Labor
|
[ * ] | [ * ] | [ * ] | |||||||||
Health Benefits
|
[ * ] | [ * ] | [ * ] | |||||||||
Petroleum Products Refined
|
[ * ] | [ * ] | [ * ] | |||||||||
Explosives
|
[ * ] | [ * ] | [ * ] | |||||||||
Construction Machinery
|
[ * ] | [ * ] | [ * ] | |||||||||
Other
|
[ * ] | [ * ] | [ * ] | |||||||||
Per Ton Assessments
|
||||||||||||
Federal Reclamation Fee
|
0.315 | 0.000 | 0.315 | |||||||||
FBLET
|
0.550 | 0.000 | 0.550 | |||||||||
Ohio Severance Tax
|
0.252 | 0.020 | 0.272 | |||||||||
Changes in Law
|
0.000 | 0.000 | 0.000 | |||||||||
|
||||||||||||
FOB Delivered Price
|
[ * ] | [ * ] | [ * ] | |||||||||
Truck Transportation Cost
|
[ * ] | [ * ] | [ * ] | |||||||||
|
||||||||||||
TOTAL CONTRACT PRICE (2)- Spec B
|
[ * ] | [ * ] | [ * ] |
(1) | Established in Amendment 2009-2, dated August 20, 2009. | |
(2) | (a) Pursuant to Amendment 2008-6, Item 3), for the first [ * ] tons delivered beginning January 1, 2009, an amount of [ * ] per ton shall be deducted from the Total Contract Price ; b) Pursuant to Amendment 2008-6, Item 4) (a), for the first [ * ] tons delivered beginning January 1, 2009, an amount of [ * ] per ton shall be added to the Total Contract Price . |
Tentative | Tentative | Tentative | ||||||||||
Contract Price (1) | Adjustments | Contract Price | ||||||||||
Cost Component | 07/01/09 | 01/01/10 | 01/01/10 | |||||||||
Labor
|
[ * ] | [ * ] | [ * ] | |||||||||
Health Benefits
|
[ * ] | [ * ] | [ * ] | |||||||||
Petroleum Products Refined
|
[ * ] | [ * ] | [ * ] | |||||||||
Explosives
|
[ * ] | [ * ] | [ * ] | |||||||||
Construction Machinery
|
[ * ] | [ * ] | [ * ] | |||||||||
Other
|
[ * ] | [ * ] | [ * ] | |||||||||
Per Ton Assessments
|
||||||||||||
Federal Reclamation Fee
|
0.315 | 0.000 | 0.315 | |||||||||
FBLET
|
0.550 | 0.000 | 0.550 | |||||||||
Ohio Severance Tax
|
0.252 | 0.020 | 0.272 | |||||||||
Changes in Law
|
0.000 | 0.000 | 0.000 | |||||||||
|
||||||||||||
FOB Delivered Price
|
[ * ] | [ * ] | [ * ] | |||||||||
Truck Transportation Cost
|
[ * ] | [ * ] | [ * ] | |||||||||
|
||||||||||||
TOTAL CONTRACT PRICE (2)- Spec
|
[ * ] | [ * ] | [ * ] |
Tentative | Tentative | Tentative | ||||||||||
Contract Price (1) | Adjustments | Contract Price | ||||||||||
Cost Component | 07/01/09 | 01/01/10 | 01/01/10 | |||||||||
Labor
|
[ * ] | [ * ] | [ * ] | |||||||||
Health Benefits
|
[ * ] | [ * ] | [ * ] | |||||||||
Petroleum Products Refined
|
[ * ] | [ * ] | [ * ] | |||||||||
Explosives
|
[ * ] | [ * ] | [ * ] | |||||||||
Construction Machinery
|
[ * ] | [ * ] | [ * ] | |||||||||
Other
|
[ * ] | [ * ] | [ * ] | |||||||||
Per Ton Assessments
|
||||||||||||
Federal Reclamation Fee
|
0.315 | 0.000 | 0.315 | |||||||||
FBLET
|
0.550 | 0.000 | 0.550 | |||||||||
Ohio Severance Tax
|
0.252 | 0.020 | 0.272 | |||||||||
Changes in Law
|
0.000 | 0.000 | 0.000 | |||||||||
|
||||||||||||
FOB Delivered Price
|
[ * ] | [ * ] | [ * ] | |||||||||
Truck Transportation Cost
|
[ * ] | [ * ] | [ * ] | |||||||||
|
||||||||||||
TOTAL CONTRACT PRICE (2)- Spec
|
[ * ] | [ * ] | [ * ] |
(1) | Established in Amendment 2009-2, dated August 20, 2009. | |
(2) | (a) Pursuant to Amendment 2008-6, Item 3), for the first [ * ] tons delivered beginning January 1, 2009, an amount of [ * ] per ton shall be deducted from the Total Contract Price ; b) Pursuant to Amendment 2008-6, Item 4) (a), for the first [ * ] tons delivered beginning January 1, 2009, an amount of [ * ] per ton shall be added to the Total Contract Price. |
Tentative | Tentative | Tentative | ||||||||||
Contract Price (1) | Adjustments | Contract Price | ||||||||||
Cost Component | 07/01/09 | 01/01/10 | 01/01/10 | |||||||||
Labor
|
[ * ] | [ * ] | [ * ] | |||||||||
Health Benefits
|
[ * ] | [ * ] | [ * ] | |||||||||
Petroleum Products Refined
|
[ * ] | [ * ] | [ * ] | |||||||||
Explosives
|
[ * ] | [ * ] | [ * ] | |||||||||
Construction Machinery
|
[ * ] | [ * ] | [ * ] | |||||||||
Other
|
[ * ] | [ * ] | [ * ] | |||||||||
Per Ton Assessments
|
||||||||||||
Federal Reclamation Fee
|
0.315 | 0.000 | 0.315 | |||||||||
FBLET
|
0.550 | 0.000 | 0.550 | |||||||||
Ohio Severance Tax
|
0.252 | 0.020 | 0.272 | |||||||||
Changes in Law
|
0.000 | 0.000 | 0.000 | |||||||||
|
||||||||||||
FOB Delivered Price
|
[ * ] | [ * ] | [ * ] | |||||||||
Truck Transportation Cost
|
[ * ] | [ * ] | [ * ] | |||||||||
|
||||||||||||
TOTAL CONTRACT PRICE (2)- Spec
|
[ * ] | [ * ] | [ * ] |
Tentative | Tentative | Tentative | ||||||||||
Contract Price (1) | Adjustments | Contract Price | ||||||||||
Cost Component | 07/01/09 | 01/01/10 | 01/01/10 | |||||||||
Labor
|
[ * ] | [ * ] | [ * ] | |||||||||
Health Benefits
|
[ * ] | [ * ] | [ * ] | |||||||||
Petroleum Products Refined
|
[ * ] | [ * ] | [ * ] | |||||||||
Explosives
|
[ * ] | [ * ] | [ * ] | |||||||||
Construction Machinery
|
[ * ] | [ * ] | [ * ] | |||||||||
Other
|
[ * ] | [ * ] | [ * ] | |||||||||
Per Ton Assessments
|
||||||||||||
Federal Reclamation Fee
|
0.315 | 0.000 | 0.315 | |||||||||
FBLET
|
0.550 | 0.000 | 0.550 | |||||||||
Ohio Severance Tax
|
0.252 | 0.020 | 0.272 | |||||||||
Changes in Law
|
0.000 | 0.000 | 0.000 | |||||||||
|
||||||||||||
FOB Delivered Price
|
[ * ] | [ * ] | [ * ] | |||||||||
Truck Transportation Cost
|
[ * ] | [ * ] | [ * ] | |||||||||
|
||||||||||||
TOTAL CONTRACT PRICE (2)- Spec
|
[ * ] | [ * ] | [ * ] |
(1) | Established in Amendment 2009-2, dated August 20, 2009. | |
(2) | (a) Pursuant to Amendment 2008-6, Item 3), for the first [ * ] tons delivered beginning January 1, 2009, an amount of [ * ] per ton shall be deducted from the Total Contract Price ; b) Pursuant to Amendment 2008-6, Item 4) (a), for the first [ * ] tons delivered beginning January 1, 2009, an amount of [ * ] per ton shall be added to the Total Contract Price . |
ARTICLE I
|
||||
DEFINITIONS; CONSTRUCTION
|
||||
|
||||
SECTION 1.1 Definitions
|
1 | |||
SECTION 1.2 Construction
|
1 | |||
|
||||
ARTICLE II
|
||||
SCOPE OF SERVICES
|
||||
|
||||
SECTION 2.1 Provision of Services
|
2 | |||
SECTION 2.2 Change of Services
|
2 | |||
SECTION 2.3 Nonexclusive
|
2 | |||
|
||||
ARTICLE III
|
||||
REIMBURSEMENT
|
||||
|
||||
SECTION 3.1 Expense Reimbursement
|
3 | |||
SECTION 3.2 Special Services
|
3 | |||
SECTION 3.3 U.S. Currency
|
3 | |||
|
||||
ARTICLE IV
|
||||
TERMS OF PAYMENT AND ACCOUNTING
|
||||
|
||||
SECTION 4.1 Calculation and Submission Of Charges
|
3 | |||
|
||||
ARTICLE V
|
||||
BOOKS AND RECORDS; REPORTS
|
||||
|
||||
SECTION 5.1 Books and Records
|
3 | |||
SECTION 5.2 Reports
|
3 | |||
|
||||
ARTICLE VI
|
||||
MISCELLANEOUS
|
||||
|
||||
SECTION 6.1 Termination
|
4 | |||
SECTION 6.2 No Fiduciary Duties
|
4 | |||
SECTION 6.3 No Representations or Warranties
|
4 | |||
SECTION 6.4 Force Majeure
|
4 | |||
SECTION 6.5 Waiver
|
4 | |||
SECTION 6.6 Further Assurances
|
4 | |||
SECTION 6.7 Notices
|
4 | |||
SECTION 6.8 Counterparts
|
5 | |||
SECTION 6.9 Applicable Law
|
5 | |||
SECTION 6.10 Binding Effect; Assignment
|
5 | |||
SECTION 6.11 Severability
|
5 | |||
SECTION 6.12 Modification; Amendment
|
5 | |||
SECTION 6.13 Entire Agreement; Supersedure
|
6 |
i
2
3
(a) |
in the case of the GP, to:
Oxford Resources GP, LLC 544 Chestnut Street Coshocton, Ohio Attention: Chairman of the Board |
4
|
with a copy to: | AIM Infrastructure MLP Fund, L.P. | ||
|
950 Tower Lane | |||
|
Suite 800 | |||
|
Foster City, CA 94404 | |||
|
Attention: Matthew P. Carbone & Brian Barlow |
(b) |
in the case of any of the Partnership Entities:
c/o Oxford Resource Partners, LP 544 Chestnut Street Coshocton, Ohio Attention: General Partner |
5
6
OXFORD RESOURCE PARTNERS, LP | ||||||
|
||||||
|
By: |
Oxford Resources GP, LLC,
its General Partner |
||||
|
||||||
|
By: |
/s/ Matthew P. Carbone
|
||||
|
Title: Authorized Person | |||||
|
||||||
OXFORD MINING COMPANY, LLC | ||||||
|
||||||
|
By: |
Oxford Resource Partners LP,
its Sole Member |
||||
|
||||||
|
By: |
Oxford Resources GP, LLC,
its General Partner |
||||
|
||||||
|
By: |
/s/ Matthew P. Carbone
|
||||
|
Title: Authorized Person | |||||
|
||||||
OXFORD RESOURCES GP, LLC | ||||||
|
||||||
|
By: |
/s/ Matthew P. Carbone
|
||||
|
Title: Authorized Person |
(a) | an act of God; | ||
(b) | a strike, lockout, labor difficulty or other industrial disturbance; | ||
(c) | an act of a public enemy, war, blockade, insurrection or public riot; | ||
(d) | lightning, fire, storm, flood or explosion; | ||
(e) | governmental action, delay, restraint or inaction; | ||
(f) | judicial order or injunction; or | ||
(g) | material shortage or unavailability of equipment. |
A-1
A-2
(a) | general administrative and management services; | ||
(b) | human resources; | ||
(c) | information technology; | ||
(d) | finance and accounting; | ||
(e) | corporate development; | ||
(f) | real property; | ||
(g) | marketing; | ||
(h) | engineering; | ||
(i) | operations (including mining operations); | ||
(j) | geological services; | ||
(k) | risk management; | ||
(l) | insurance services; | ||
(m) | tax and audit; and | ||
(n) | investor relations. |
B-1