Cloud Peak expands Cordero Rojo potential

CLOUD Peak Energy has reached an agreement with a landowner near its Cordero Rojo coal mine in Wyoming which provides the company with access to approximately 95 million tons of additional coal and enhances flexibility for the future development of the mine.

Lou Caruana

The additional coal consists of tons directly under the acquired land and other adjacent tonnage that is anticipated to become available for future mining as a result of acquiring the surface access.

The agreement primarily involves a land exchange and production payments from any future sales of the underlying coal, including certain recoupable advance production payments.

As of December 31, 2014, Cloud Peak Energy controlled approximately 1.1 billion tons of proven and probable coal reserves.

These additional tons were not included in Cloud Peak Energy’s reported year-end 2014 proven and probable reserves.

“The company will evaluate inclusion of these additional tons as part of its year-end 2015 reserves reporting,” it said in a statement.

“Cloud Peak Energy made its final lease by application payment for its federally leased coal in June 2015 and has no further committed LBA payments.”