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L&L provides bridge of assistance to Bowie

US-based and China-focused operator L&L Energy has provided a secured bridge loan to Colorado-based Bowie Resources for the operation of the Bowie longwall mine, idled earlier this year pending financing.

Donna Schmidt
L&L provides bridge of assistance to Bowie

The agreement provides Bowie with initial funding of up to $US3 million in loans to be used for ongoing operations. L&L will fund the loan in tranches; the first $1 million was provided November 23.

The loans have a 9% interest rate per annum. Under the transaction, L&L will have the option to acquire up to a 9% equity interest in Bowie at nominal costs, subject to conditions.

L&L shares co-senior status with Bowie's only other secured creditor, GE Energy Financial Services.

The Bowie operation near Paonia began production in 1997, with longwall operations at the mine starting in 1999. Between 2000 and 2007, Bowie produced between 4 and 5.5 million tons per annum of high-quality coal and its future output is projected to be 4-5Mtpa.

The operation has 25Mt of proven reserves and potentially another 15Mt after permitting. Bowie’s largest customer is the Tennessee Valley Authority with 3Mtpa, but the mine also has other long-term, multi-year contracts.

"This is an excellent opportunity to acquire a portion of a high-quality, US-based coal mining operation with an experienced management team at an attractive price,” L&L chairman and chief executive Dickson Lee said.

“The application of US mining management and safety practices is a strategic advantage for L&L in China. The Bowie team helps reinforce that advantage."

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