Blackhawk Mining expects to mine and sell more than 14.5 million st of Central Appalachian metallurgical and thermal coal in 2018 after reaching an agreement with lenders to strengthen the its balance sheet and provide nearly $100 million of incremental liquidity next year.
In a statement Monday, Blackhawk said the primary motivation behind its transaction with lenders, which included restructuring existing loans, was the continued expansion of its met business. Blackhawk now hopes to mine 9 million st of met coal next year.
Since 2016, the company has developed five new mines expected to produce about 2 million st of premium high-vol met coal in 2018. While the met expansion was slower than anticipated this year because of operational headwinds, the company said it has since stabilized and "management believes in 2018 that it is prudent to reinvest cash into the operating assets versus continuing with the current debt amortization schedule."
Company officials could not be reached for comment Monday.
Blackhawk said the liquidity benefit from the financial transaction alone will cover its capital investment plan over the next 12 months and position the company "to maximize the value of its industry-leading metallurgical coal portfolio.
CEO Mitch Potter said the deal "positions Blackhawk to take advantage of strong metallurgical coal markets and achieve our organic growth potential through continued investment in our portfolio of tier 1 high-vol metallurgical assets."
