The company said Monday afternoon that the $US55 million tab for the newest takeover was being funded through its credit facility.
NRP has now paid $105 million of the $255 million for the total acquisition of approximately 200 million tons. It expects to complete $135 million in additional acquisitions next year, and another $15 million in 2012.
The multi-phase transaction for Deer Run was initially announced by NRP in September 2009, when it signed a definitive agreement for the reserves in Montgomery and Bond counties in Illinois. The first acquisition was 3.3Mt for which it paid $10 million.
“We are excited about the opportunity to acquire additional coal reserves in the Illinois Basin as
the Cline team develops this new mine,” company president Nick Carter said at the time, noting that the move would help it to continue its Illinois Basin diversification.
Deer Run’s coal reserves are leased to Cline affiliate Hillsboro Energy, which is continuing development at the operation near Hillsboro ahead of its expected start by year-end 2010. Longwall Production should commence in early 2012.
Once at full production with the longwall panel also in place, the mine is forecasted to produce 8-10Mt.
With the mine’s expected lifespan of two decades, the company is hoping for income of more than $40 million per year from Deer Run.
Illinois has 18 mines, 11 underground, according to the Illinois Coal Association.
In 2009, the group noted that Deer Run’s permit was the region’s first since 1982, when the Illinois Department of Natural Resources gave the go-ahead to what is now the Viper operation.
Production in Illinois has been 32-33 million tons annually since 2003.