The operations mine and market steam coal and mid-to-high volatile metallurgical coal for sale primarily into the power generation and steel markets.

The steam coal is primarily sold to a cooperative association which provides fuel under a long-term contract with a US utility. The metallurgical coal is sold to several customers.

The acquired companies operate three mines on leased reserves in central Alabama.

For the year ended December 31, 2011, the Reed Minerals companies sold 0.9 million tons of coal and had revenue of about $86.0 million and net income of about $4 million. North American Coal expects the acquisition to be accretive to earnings immediately.

President and chief executive officer of North American Coal Bob Benson said the acquisition provides North American Coal with an opportunity to expand its established surface mining business into bituminous coal markets.

"North American Coal has been looking for opportunities to grow,” he said.

“The Reed Minerals' coal reserves, established reputation and location offer us that opportunity. The eight-year steam coal sales contract provides a stable revenue, profit and cash flow base while we further develop a metallurgical coal business platform.

“We believe this combination will offer the company, its customers and its employees a number of substantial benefits, which we expect will lead to significant opportunities for future growth and profitability."

The acquisition was funded using borrowings under North American Coal's existing credit facility.