The company said that Paul Risinger, Lily Group’s sole shareholder, will continue to serve as the president of VHGI Coal and will remain a key shareholder in the new, larger umbrella.

While financial terms were not discussed, the company said that VHGI had loaned Lily more than $US5.5 million prior to the execution of the stock purchase agreement so that it could fund operations and expansion plans.

The deal, which is expected to close as soon as possible but has a drop-dead date of February 1, is subject to conditions including the receipt of consents and approvals, the completion of due diligence and adequate financing by VHGI Coal.

VHGI Coal also has the discretion to waive the conditions.

“We are pleased to have entered into the definitive agreement with the Landree Mine coal mine as it will be the linchpin of our plan to be a significant player in the Midwestern coal mining market,” chief executive officer Doug Martin said.

“The Landree mine became operational under the superb leadership of Rick Risinger. With the help and support of Rick's management team and our dedicated Lily Group employees, our plan is to extract over 21 million salable tons of coal onsite while using our company's cash flow to acquire and develop other coal opportunities, first in Greene County, Indiana and then beyond."

Risinger said the Lily Group was also looking forward to being in the VHGI family.

“Doug Martin and Scott Haire at VHGI have been essential to the process of the Landree mine becoming operational, in terms of both capital committed and in developing coal sales opportunities,” he said.

“With their assistance, we have developed significant contracts and relationships with regional and international coal buyers. From our discussions with these buyers, we are optimistic that the demand for our quality of Landree Mine coal will remain strong for the foreseeable future."

In addition to energy and mining, VHGI has assets and interests in precious metals and healthcare technology.