NRP wraps third acquisition of coal reserves at Deer Run Mine in Illinois

Source: Natural Resource Partners L.P. 

Natural Resource Partners L.P. (NYSE: NRP) announced that it has completed the third of seven acquisitions of coal reserves at the Deer Run mine in Illinois for $55 million from Colt LLC, an affiliate of the Cline Group. The acquisition was funded through NRP's credit facility. NRP has paid $105 million of the $255 million slated for the acquisition of approximately 200 million tons of reserves. Future closings will be associated with the completion of certain milestones relating to the new mine's construction. NRP anticipates completing additional acquisitions totaling $135 million in 2011 and $15 million in 2012. 

The Deer Run mine is located near Hillsboro in Montgomery and Bond Counties, Illinois and the coal reserves are leased to the mining company Hillsboro Energy, an affiliate of the Cline Group. Construction of the new longwall mine is well underway with initial production expected by year-end 2010, and longwall production expected to commence in early 2012. 

Production from the mine is forecasted to be approximately eight to ten million tons per year when the longwall is in full production, from which NRP ultimately anticipates receiving in excess of $40 million per year of income. Based upon these production levels, the life of the mine will exceed 20 years. 

Natural Resource Partners L.P. is a master limited partnership headquartered in Houston, TX, with its operations headquarters in Huntington, WV. NRP is principally engaged in the business of owning and managing mineral reserve properties. NRP primarily owns coal, aggregate and oil and gas reserves across the United States that generate royalty income for the partnership.

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