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Arch Coal Inc.

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Msg  67 of 72  at  10/10/2013 12:08:54 PM  by

mlkrborn


ACI 3.75

  Arch Coal acquires metallurgical coal reserves adjacent to Leer Mine, settles potential legal dispute with Patriot Coal (PCXCQ) (ACI) 3.75 : Co announced that it has entered into an agreement to acquire the Guffy property from Patriot Coal (PCXCQ) for $16 million in cash. The Guffy reserves are owned in-fee, are contiguous to Arch's Tygart Valley reserves and the Leer mine, and are of comparable quality to Leer's high-volatile "A" metallurgical coal reserves. The addition of the Guffy reserves will enable Arch to recover up to an incremental 8 million tons of metallurgical coal at the Leer mine, thereby extending the estimated mine life of Leer by nearly three years.

Co also announced that it has resolved all pending and potential legal claims with Patriot stemming from Arch's sale of coal companies to Magnum Coal, a subsidiary of ArcLight Capital Partners, in 2005 and the subsequent purchase of those companies by Patriot in 2008. In consideration for this release, Arch will pay $5 million in cash to Patriot upon its exit from bankruptcy. Additionally, the settlement includes the release of a $16 million letter of credit posted by Patriot in Arch's favor for surety bonds related to the companies sold to Magnum. Under the terms of the agreement, Patriot is required to replace the bonds in their own name or repost an $8 million letter of credit in Arch's favor by Dec. 31, 2015.


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