The Mercuria Group subsidiary said late last week that it has not only replaced the Bowie’s prior primary senior lender but also that it has provided the producer with additional sources of funding.
Other Mercuria arms have acquired warrants in Bowie and will perform marketing and risk management services that will help bring the miner opportunities to optimize sales now and into the future.
The partnership comes after the June restart of the Bowie No. 2 longwall, part of a development project which had been nearly three years in the works.
Bowie produced an average of 5 million tons of bituminous coal annually from 2000 through 2007, classified as super compliant with 12,000 Btu and 0.5% sulfur. Following the development work it anticipates that it will continue producing at that level for the next eight to ten years.
“Bowie's current recoverable reserve base is estimated at 40Mt, and the company has a new drilling program underway to further define and quantify additional potential reserves,” Mercuria officials said.
Bowie Resources, a subsidiary of Cedars Energy, began commercial coal production from the mine in 1997 and commenced the mine’s longwall in 2000.
It currently has $US850 million of revenue remaining under long-term contracts featuring favorable pricing and terms.