EastCoal secures supply deal extension

CANADIAN miner EastCoal has extended its off-take sale agreement with Metinvest for metallurgical coal from its Menzhinsky operation in the Ukraine through next year.
EastCoal secures supply deal extension EastCoal secures supply deal extension EastCoal secures supply deal extension EastCoal secures supply deal extension EastCoal secures supply deal extension

Courtesy of EastCoal

Donna Schmidt

Officials said the deal for output from the coking coal mine had been extended to the end of next year, with an increase in tonnage to 312,000 tonnes per annum.

Beginning in January 2013, it will ship volumes of 26,000 tonnes per month.

Metinvest also will take 12,000tpm for November and December 2012, double its current off-take.

The coal received must meet Metinvest's quality standards, EastCoal said, then be priced at prevailing market prices for that time.

“With this agreement, the company has secured the sale of 100% of its planned production from the underground mining operations at the Menzhinsky mine and the anticipated output from the wash plant at the same mine through December 2013,” chairman John Byrnes said.

“At current market prices, excluding VAT, this would result in excess of $40 million of revenue."

EastCoal acquired the Menzhinsky and its JORC-compliant coal resources of 40.7 million tonnes in June and commissioned a wash plant the following month at the property.

The mine is in the country’s easterly Lugansk region near EastCoal’s flagship Verticalnaya anthracite project.

The deal was announced in April and required the Canadian miner to pay Aponet Enterprises $US2 million cash upon transfer of ownership and 4 million common shares in EastCoal.

In addition to the Menzhinsky mine, EastCoal is also developing the Verticalnaya anthracite mine.

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