15th Sep 2008 07:00
Atlantic Coal plc / Index: AIM / Epic: ATC / Sector: Mining
15 September 2008
Atlantic Coal Plc (AIM: ATC)
('Atlantic' or 'the Company')
Raises £2,133,560 to develop US Coal mine and restructures the Board, award of share options and related party transaction
Atlantic Coal plc, the AIM listed open cast coal production and processing company with activities in Pennsylvania, USA, has raised £2,133,560 through the issue of 426,712,000 new ordinary shares in Atlantic, via a placing by Fox-Davies Capital Limited to a combination of new institutional investors as well as existing shareholders and the partial conversion of a loan made by the Managing Director of the Company (the "Placing"). The funds raised will be used to advance Atlantic's Stockton opencast anthracite mine into full production, implement an expansion strategy, and for general working capital purposes.
The Company is also pleased to announce a restructuring of the Board and Management. This is part of the Company's strategy to recruit highly experienced individuals with broad corporate and industry experience, in order to advance the development of the Company, including its 4 million tonne coal reserve at the Stockton Colliery ("Stockton") in Pennsylvania and to identify additional value added deals both in the US and the UK.
Adam Wilson is joining the Board and will assume the role of non-executive Chairman replacing Chris Lambert who will be standing down from the Board to concentrate on his other ventures. Ken Ford will join as senior non-executive director, while Max Crosland joins as non-executive director to provide enhanced experience in the coal and power sector. Greg Kuenzel is moving to executive Finance Director and replaces Ray Petrilla who will remain on the Board as an executive director but will focus his activities on managing the production operations at Stockton in Pennsylvania. All of the Board appointments will be effective from Tuesday, 16 September 2008.
The Board believes that with this funding, the newly structured and enhanced Board and the anticipated completion of the re-location of the Norfolk and Southern Railroad, which has curtailed production at Stockton, the Company is now at a transformational point in its development. The Stockton anthracite fields have defined reserves in excess of 4 million tonnes and an estimated production potential of over 400,000 run of mine tonnes per annum. The current price for anthracite is circa US$140 per tonne. Work is continuing at pace to prepare for the final relocation of the track which will open up the southern face of the mine for extraction. With this open, production levels, stripping ratios and resulting revenues will increase, which should have a significant impact on the Company's financial performance.
Atlantic Coal's Managing Director, Stephen Best, said, "With the new Board and capital injection, we believe we are ideally positioned to advance the Company in what I am confident will be a transformational year. I believe the Company's ability to raise this amount of money in challenging market conditions is a testament to the quality of the asset at Stockton and our plans to build the Company going forward. We look forward to a continued period of progress and development at the Stockton mine. With a quantified reserve in excess of 4 million tonnes and a buoyant coal price, we believe the current share price does not reflect the true value of the Company. Additionally I'd like to welcome Adam, Ken and Max to the Board. I believe their combined expertise and experience will prove invaluable to the Company as we continue to move forward and look to develop new strategic initiatives. The Board would also like to thank Chris for his involvement in Atlantic Coal and wish him well in his future endeavours."
Information Regarding New Directors:
Adam Wilson holds a BA (Hons) in Accounting and Financial Management. He qualified as a barrister before joining NM Rothschild in 1994 as a graduate trainee. He subsequently moved to LCF Rothschild, specialising in equity derivative and structured product sales. In 1997 he joined Teather & Greenwood where he became Head of Derivatives before joining Hichens, Harrison in 2003. He was appointed Managing Director of Hichens, Harrison in October 2004 (now Religare Hichens Harrison plc). Adam is an associate member of the Institute of Investment Management and Research and a member of the Securities Institute as well as being a certified FFAS financial analyst.
Ken Ford has an Economics degree and over 35 years of experience in the City. From 1993 he worked at Landsbanki (formerly Teather & Greenwood) serving as Head of Corporate Finance, Managing Director, Chief Executive Officer and latterly as Deputy Chairman until retirement in 2007. Prior to this he worked as a director at Aberdeen Asset Management and served for seven years as a director at Morgan Grenfell as Head of Research and Head of Corporate Finance at Morgan Grenfell Securities. Ken is a Fellow of the Securities Institute and on the executive committee of the Quoted Companies Alliance.
Max Crosland has over 30 years experience in the coal sector, holding Director level positions for the past 20 years. Max has been involved in all aspects of opencast and underground mining, coal preparation & marketing in the UK & USA. More recently he has been involved in the power generation sector, heading up international coal and biomass procurement and logistics for UK electricity generation companies, and in new-build biomass power station site procurement & development. He is currently the Head of Coal & Logistics for Welsh Power Group Limited.
Adam Richard Wilson (age 38), is a director or has been a director of the following companies during the previous five years:
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Current Directorships or partnerships:
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Past Directorships within the last 5 years:
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London Wall Capital Ltd
London Wall Nominees Ltd
Religare Hichens Harrison plc
Hichens Harrison (Asia) Ltd
Hichens Harrison (Africa) Ltd
Hichens Harrison (South America) Ltd
Hichens Harrison (Middle East) Ltd
HDIM Ltd
Medserve (ME) Ltd
Hichens Harrison (Ventures) Ltd
Blomfield Street Securities Ltd
African Bio Fuels Ltd
Asian Bio Fuels Ltd
South America Wireless
Telecommunications Ltd
Ethical Investments (Far East) Ltd
Medical Partners (ME) Ltd
African Wireless Ltd
Student Accommodation Company (India) Ltd
High Road Capital plc
Vivaldi Corporate Finance Ltd
Hichens, Harrison (North America) Ltd
Blomfield Capital Ltd
Blomfield Investment Management Ltd
ARH Leisure Investments plc
Hichens Investment Management Ltd
Dale Properties (Port Talbot) Ltd
Blamire Ltd
Asian Independent Power Ltd
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London Wall Capital Limited
Hitlines (UK) Limited
Green C02 plc
London Wall Capital Investment Management Ltd
Teather & Greenwood Ltd
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Eric Kenelm Ford (age 59), is a director or has been a director of the following companies during the previous five years:
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Current Directorships or partnerships:
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Past Directorships within the last 5 years:
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Lewis PR
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Landsbanki Securities (UK) Holdings plc
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Mintonview Ltd
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Landsbanki Securities (UK) Ltd
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The Wells Fine Dining Company Ltd
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Teather & Greenwood Nominees Ltd
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BrainJuicer Group plc
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Teawood Nominees Ltd
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BrainJuicer Ltd
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The Quoted Companies Alliance
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7 safe group Ltd
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Camomile Wood Nominees Ltd
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Lewis Communications (Holdings) Ltd
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Escalon Investments Limited
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Lewis Communications Limited
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First Manchester Properties Limited
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Principal Residential Properties Limited
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The Flying Kiwi Inns Ltd
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Hybridan LLP
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Ian Max Crosland, (age 55) is a director or has been a director of the following companies during the previous five years:
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Current Directorships or partnerships:
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Past Directorships within the last 5 years:
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Carron Energy Ltd
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None
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M2 Management Services Ltd
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Save as set out below there are no further disclosures to be made in relation to Adam Wilson, Ken Ford or Max Crosland pursuant to Schedule Two, paragraph (g) of the AIM Rules for Companies.
By Board Notice 431 dated 16 July 1997 the Securities and Futures Authority ("SFA") gave notice that disciplinary proceedings brought against Teather & Greenwood Limited Partnership (of which Mr Ford was a partner) and Mr Ford relating to breaches of the Securities and Investment Board principles 2 and 9 had been concluded by settlement with the following outcome:
Teather & Greenwood Limited Partnership was reprimanded, fined £50,000 and agreed to pay a contribution of £10,000 towards SFA's costs; and
Mr Ford was reprimanded, fined £8,000 and agreed to pay a contribution of £2,000 towards SFA's costs.
SFA took into account that Teather & Greenwood Limited Partnership had previously conducted a full internal review of its compliance procedures and had implemented a remedial action plan. SFA also took into account that neither Teather & Greenwood Partnership nor Mr Ford has previously been subject of disciplinary action, both cooperated with SFA and no clients had been disadvantaged. Mr Ford was also reprimanded by the Securities Institute as a result.
Max Crosland was a director of Rackwood Mineral Holdings plc, and a subsidiary company, Rackwood Colliery Company Limited, which, following the imposition by HM Government's Department of Environment, Transport and Regions of increased restrictions on the development of new open cast mining operations in the UK and financing difficulties for certain operations in USA, went into administration on 29 January 1999. Rackwood Mineral Holdings plc was subsequently dissolved on 14 April 2003 and Rackwood Colliery Company Limited was dissolved on 23 August 2008.
Award of Options:
Adam Wilson and Greg Kuenzel will be awarded the following options in Atlantic under their contracts of engagement as non-executive Chairman and executive Finance Director respectively, the terms of which are detailed below. Adam Wilson will be granted options to subscribe for 22,074,040 ordinary shares in the Company at an exercise price of 0.5p per share valid for 5 years, such options will vest in three equal instalments over a twelve month period being 7,358,023 on appointment, 7,358,023 after 6 months continued service and 7,358,023 after 12 months continued service.
Greg Kuenzel will be granted options to subscribe for 4,500,000 ordinary shares in the Company shares at an exercise price of 0.5p per share valid for 5 years and such options will vest in two instalments over a 6 month period being 3,000,000 on appointment and 1,500,000 after 6 months continued service.
In addition, Greg Kuenzel will be granted options to subscribe for 4,500,000 ordinary shares at an exercise price of 1.2p per share valid for 5 years and these options will vest in two instalments over a twelve month period being 1,500,000 after 6 months continued service and 3,000,000 after 12 months continued service.
Loan Conversion Agreement:
Atlantic Coal's Managing Director, Stephen Best, will be participating in the Placing by converting $500,000 of funds previously provided under his working capital facility into equity of the Company at the placing price. The conversion value amounts to £283,866 using an exchange rate of 1.7645 USD to £1, and will equate to 56,673,000 new ordinary shares at the placing price of 0.5p per share. These shares will represent [4.77]% of the issued diluted share capital of the Company following the Placing and will be credited to Stephen Best's spouse, Mary Catherine Best, who is a significant shareholder in the Company, holding 41,098,186 ordinary shares (being 5.39%) prior to the Placing and the conversion of Stephen Best's loan funds. Prior to the Placing, Mary Catherine Best, Stephen Best, and other members of the Best Family Concert Party, as defined in the Company's Admission Document dated 17 October 2007 held 137,154,752 ordinary shares equating to 18.0% of the issued share capital of the Company. Following the Placing, the Best Family Concert Party will hold [16.32]% of the enlarged issued share capital of the Company. The loan conversion agreement and Stephen Best's participation in the Placing constitutes a related party transaction under the AIM rules for Companies and the Board of the Company, with the exception of Stephen Best, having consulted with the Company's nominated adviser, HB Corporate, consider that the terms of the transaction are fair and reasonable insofar as its shareholders are concerned.
**Ends**
For further information on the Company, visit: www.atlanticcoal.com or contact:
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Stephen Best / Greg Kuenzel |
Atlantic Coal plc |
Tel: 020 7182 1747 |
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Rod Venables / James Reeve |
HB Corporate |
Tel: 020 7510 8600 |
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Richard Hail, Head of Corporate Finance |
Fox Davies Capital |
Tel 020 7936 5230 |
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Hugo de Salis / Victoria Thomas |
St Brides Media & Finance Ltd |
Tel: 020 7236 1177 |
About the Company:
Atlantic Coal owns and operates the Stockton Colliery which comprises an opencast anthracite mine and an adjacent anthracite washing plant. The mine is an established non-union surface mine encompassing circa 900 land acres in the Hazle Creek Valley, Pennsylvania and has an estimated proven reserve of 4 million tonnes. Mining of raw coal is from the high quality mammoth seam, while washing and sizing takes place in the 150 tonne per hour coal preparation plant. J T Boyd Company, the Company's Competent Person, estimated that there is over 10 years of mine life from existing reserves at an average production rate of 400,000 Run of Mine ('ROM') tonnes per annum. Based on historic production levels, the mine is capable of and is projected to produce approximately 450,000 ROM tonnes of coal per year. Mining operations are conducted by the use of hydraulic excavators. Uncovered raw coal is then loaded into 100 tonne trucks for delivery to the onsite preparation plant. As each section of the mine is developed, mining progresses from the northern and southern faces into the basin. This yields a constant flow of raw coal to the preparation plant.
Related Shares:
Atlantic Coal