CANONSBURG, Pa., May 8, 2019 /PRNewswire/ -- CONSOL Energy Inc.
(NYSE: CEIX) announced today that it has commenced the development
of a new low-vol metallurgical coal mining operation in
Wyoming County, West Virginia,
with an anticipated completion date of 2021.
"We are very pleased to announce the commencement of the Itmann
Mine project, our first major growth initiative," said Jimmy Brock, Chief Executive Officer of CONSOL
Energy Inc. "Since becoming an independent publicly-traded company,
we have meaningfully de-levered our balance sheet and improved our
liquidity through strong operational performance and completion of
our 1Q19 refinancing. We also continue to return capital to our
shareholders through our expanded repurchase program announced
today. The Itmann Mine begins the next phase of our evolution, as
we are now focusing on strategic and controlled growth as an
additional avenue to increase our per-share value.
"Consistent with our goal of
being a low-cost, high-margin producer of high-quality products, we
believe the Itmann Mine will align perfectly with our current asset
base. It will further diversify our already robust portfolio by
adding a new metallurgical coal product stream to the mix. When
combined with our current crossover metallurgical product from the
Pennsylvania Mining Complex, which we anticipate will continue to
become more attractive in the marketplace with an upcoming
improvement in sulfur content, the addition of this new
Itmann product should allow us to
consistently produce 2.5+ million tons of metallurgical quality
coal annually, after the mine and preparation plant are constructed
and fully functioning in 2021. We are also excited about the
timing of the Itmann project, as
coking coal prices remain attractive. While other new metallurgical
coal supply is expected to emerge in the U.S. in the coming years,
we believe that most of this new supply will be focused on high-vol
metallurgical products; meanwhile, the Itmann Mine is targeted at
the domestic low-vol production space, which recently has seen some
supply come offline, and which we believe could continue to remain
constrained going forward due to limited availability of
high-quality reserves. Our initial market outreach has indicated a
strong interest level among domestic and international customers in
the Itmann product."
Some key expected economic metrics surrounding the Itmann project are summarized below:
- 600+ thousand tons per year of high-quality, low-vol coking
coal production at full run rate.
- Anticipated mine life of 25+ years.
- Cash cost of coal sold per ton1 of $65-$75, once
steady-state production is achieved.
- Construction of the mine is expected to begin in late 2019 or
early 2020, pending successful permitting and project development
efforts, which are ongoing and progressing as planned.
- Full production is expected in 2021, upon the completion of a
new preparation plant.
- Total capital expenditures of $65-$80 million
over the next two years to develop the mine and preparation
plant.
We expect that this project will be funded internally by our
strong organic free cash flow generation and will not significantly
affect our ability to continue to de-lever our balance sheet or to
opportunistically repurchase CEIX shares or CCR units.
Footnotes:
1CEIX is unable to provide a
reconciliation of cash cost of coal sold per ton, an operating
ratio derived from non-GAAP financial measures, due to the unknown
effect, timing and potential significance of certain income
statement items.
About CONSOL Energy Inc.
CONSOL Energy Inc. (NYSE: CEIX) is a Canonsburg-based producer and exporter of
high-Btu bituminous thermal and crossover metallurgical coal. It
owns and operates some of the most productive longwall mining
operations in the Northern Appalachian Basin. Our flagship
operation is the Pennsylvania Mining Complex, which has the
capacity to produce approximately 28.5 million tons of coal per
year and is comprised of 3 large-scale underground mines:
Bailey, Enlow Fork, and Harvey. The company also owns and operates
the CONSOL Marine Terminal, which is located in the port of
Baltimore and has a throughput
capacity of approximately 15 million tons per year. In addition to
the ~698 million reserve tons associated with the Pennsylvania
Mining Complex, the company also controls approximately 1.6 billion
tons of greenfield thermal and metallurgical coal reserves located
in the major coal-producing basins of the eastern United States. Additional information
regarding CONSOL Energy may be found at www.consolenergy.com.
Contacts:
Investor:
Mitesh Thakkar, (724) 416-8335
miteshthakkar@consolenergy.com
Media:
Zach Smith, (724) 416-8291
zacherysmith@consolenergy.com
Cautionary Statement Regarding Forward-Looking
Statements
Certain statements in this press release are "forward-looking
statements" within the meaning of the federal securities laws. With
the exception of historical matters, the matters discussed in this
press release are forward-looking statements (as defined in Section
21E of the Securities Exchange Act of 1934, as amended) that
involve risks and uncertainties that could cause actual results or
outcomes to differ materially from those expressed in or implied by
the forward-looking statements. Accordingly, investors should not
place undue reliance on forward-looking statements as a prediction
of actual results. The forward-looking statements may include
projections and estimates concerning the timing and success of
specific projects and our future production, revenues, income and
capital spending. When we use the words "anticipate," "believe,"
"could," "continue," "estimate," "expect," "intend," "may," "plan,"
"predict," "project," "should," "will," or their negatives, or
other similar expressions, the statements which include those words
are usually forward-looking statements. When we describe strategy
that involves risks or uncertainties, we are making forward-looking
statements. We have based these forward-looking statements on our
current expectations and assumptions about future events. While our
management considers these expectations and assumptions to be
reasonable, they are inherently subject to significant business,
economic, competitive, regulatory and other risks, contingencies
and uncertainties, most of which are difficult to predict and many
of which are beyond our control. Specific risks, contingencies and
uncertainties are discussed in more detail in our filings with the
Securities and Exchange Commission. The forward-looking statements
in this press release speak only as of the date of this press
release and CEIX disclaims any intention or obligation to update
publicly any forward-looking statements, whether in response to new
information, future events, or otherwise, except as required by
applicable law.
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SOURCE CONSOL Energy Inc.