Bowie Resource Partners to Be Acquired by Canyon Consolidated Resources

Published: December 13, 2017 |

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A group of investors led by John Siegel and Murray Energy Corporation have formed Canyon Consolidated Resources, LLC (CCR), which has reached an agreement to purchase Bowie Resource Partners, LLC (BRP), effectively buying out Galena Private Equity Resource Fund’s (a subsidiary of Trafigura PTE LTD) equity stake in the subject assets.

The closing of the acquisition of BRP by CCR is expected to close on or before November 15, 2017, and entities owned or controlled by Siegel and Murray Energy will each own approximately 30.5 percent of the equity interests in CCR at the closing.

CCR will combine the respective western bituminous assets of BRP and Murray Energy through a strategic relationship, resulting in significant consolidation synergies, creating a differentiated platform focused on:

• Operating some of the safest, lowest‑cost, strategically-located underground coal mines producing high quality thermal coal;

• Providing key regional customers with a lower delivered cost fuel option, compared to coal from other producers in the western bituminous region, coal from other basins and natural gas, capitalizing on high productivity, high quality coal and geographic proximity to customers;

• Fulfilling and extending long‑term, high‑volume, fixed-price coal supply agreements at attractive margins;

• Capitalizing on a differentiated transportation and logistics network as the only U.S. coal producer with long-term contracted U.S. west coast export capacity; and pursuing further consolidation of coal assets in the western bituminous region.

As part of the transaction, affiliates of CCR and Murray Energy will enter into a coal supply agreement pursuant to which CCR will purchase coal produced from Murray Energy’s Lila Canyon mine in Utah, which will allow CCR to optimize the production, blending and logistics of BRP’s Sufco, Skyline, and Dugout Canyon mines, also located in Utah. In addition, affiliates of CCR and Murray Energy will enter into a services agreement pursuant to which Murray Energy will provide certain operational, procurement and administrative services for CCR resulting in significant savings and cost synergies.

“I am extremely excited to partner with Murray Energy to create this differentiated geographical franchise in the coal industry,” said John Siegel, who will serve as chief executive officer and Executive Chairman of CCR.

“The combination of the uniquely contracted assets, export capacity and workforce of BRP, with Murray Energy’s Lila Canyon mine, buying power and consolidation experience, will produce an excellent platform for performance and growth,” said Siegel.

“Murray Energy, under the leadership of Mr. Murray and Rob Moore, has been successful in consolidating three major mining complexes in the United States and creating synergies. We are looking forward to working with them to ensure that these mines become even more competitive in the domestic and international marketplace,” added Siegel.

“Like John, we believe that the combination of the western bituminous assets of BRP and Murray Energy will result in significant synergies and allow both companies to reduce operating costs, increase margins and continue to provide excellent service to the domestic and international coal buyers that seek the high-quality coal produced from these Utah mines,” said Robert E. Murray, Chairman, president and chief executive officer of Murray Energy.

In connection with the transaction, BRP will refinance its existing senior secured credit facilities with new debt financing. In addition, Javelin Global Commodities and Grupo Clisa, two premier coal marketing firms, will contribute cash to CCR in exchange for equity in CCR and certain exclusive export marketing rights.

“I would like to thank Trafigura and Galena for their confidence and cooperation in advancing the western bituminous vision that was the genesis of first, BRP, and now CCR,” said Siegel.

About Bowie Resource Partners
Bowie Resource Partners LLC produces high-quality, clean-burning coal that is sold to markets throughout the world. They are a highly competitive coal company that serves the Western U.S. power generation industry and export markets. Based in Louisville, Kentucky, with a regional office in Grand Junction, Colorado, the company employs over 950 staff and has an annual productive capacity of 12-14 million tons of thermal coal.

To stop by Bowie Resource Partners’ website, CLICK HERE

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