L&L to Finalize Acquisition of Two (2) New Mines, Expanding Coal Production
SEATTLE, Oct. 22, 2012
SEATTLE, Oct. 22, 2012 /PRNewswire/ -- L & L Energy, Inc. (NASDAQ: "LLEN")
("L&L" or "Company"), a Seattle-based company with a track record of
profitable coal operations in China, announces that it expects to finalize the
acquisition of two new mines, the LuoZhou Mine ("LuoZhou") and LaShu Mine
("LaShu"), in the next 30 days.
Both LuoZhou and LaShu are newly constructed mines located in HeZhang County,
Guizhou Province China, near L&L's Weishe Mine. The two mines produce low
sulfur, high BTU, anthracite coal with approximately 34.2 million tons of
combined coal reserves. LuoZhou has 27 million tons of reserves and in
accordance with the newly adopted mining standards set by government, has
completed its trial production. It is anticipated to produce at an initial
annual rate of 200,000 tons in December, ramping up to its approved rate of
300,000 tons per year over the subsequent months. LuoZhou is targeted to
expand to 450,000 tons by the end of 2013. LaShu is starting its trial
production process and will initially produce at a rate of 150,000 tons per
year and ramp up to its approved rate of 300,000 tons. Both mines are
currently owned by Union Energy ("Union"), a partner of L&L.
Union owns a portfolio of 7 mines in HeZhang County. As disclosed earlier,
Union wishes to diversify its mining portfolio and to expand its customer base
with L&L. L&L's acquisition of approximately 90% controlling interest in
LuoZhou and LaShu will be structured as an equity interest swap for L&L's
coking coal mine and its Zone Lin coking facility. Details of the swap are
being reviewed by advisers and the transaction is expected to be completed
within 30 days. Subject to final valuation, L&L may issue cash and/or a small
amount of LLEN shares to Union as additional consideration under the swap.
Expansion of the Weishe Mine
As of two months ago, L&L's Weishe mine received its safety and regulatory
approvals and has ramped up to its approved rate of 150,000 tons per year. As
management has continued to gain operational confidence, a decision has been
made to begin the expansion of Weishe Mine to 450,000 tons of annual
production, further improving its sales.
Subject to the final terms and conditions, the above three events if fully
executed will bring approximately one million tons of new coal production to
L&L. This new tonnage will generate approximately $100 million of new sales
and approximately $40 million of profit for L&L's mining segment at today's
L&L's Chairman and CEO, Dickson Lee, commented: "I am pleased with leadership
of Union Energy to close the transaction in the next 30 days. The acquisition
is a realization of L&L's consolidation strategy, with emphasis on building
coal reserves and leveraging the government's consolidation policy to
substantially increase sales and EPS. We expect to work closely with Union
Energy as a partner in the region for many years to come."
Forward Looking Statements
The statements containing words that are not historical fact, including
statements related to Company's future performance, are all "forward-looking
statements" within the meaning of the Private Securities Litigation Reform Act
of 1995, and that involve a number uncertainties. Actual results of the future
events described in this document could differ materially. Other than as
required under the securities laws, the Company does not assume a duty to
update these forward-looking statements.
L&L Energy, Inc.
SOURCE L & L Energy, Inc.
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