The company announced today that it has signed a memorandum of understanding to acquire a 50 percent controlling interest in the LuoZhou Mine in HeZhang County, Guizhou Province in China. It will pay a deposit of approximately $349,000 for LuoZhou. The remaining balance will be paid in installments under other considerations, including payment-in-kind of non-strategically held interests or perhaps even stock. Terms for the remaining balance have yet to be finalized.
This acquisition will mark its third transaction with Union Energy, a local partner. Previous deals include the purchase of the Weishe Mine, currently in production, and the memorandum of understanding to acquire a controlling interest in the LaShu Mine. Both are also located in the county. LuoZhou is currently in trial production and will reach its approved rate of 150,000 per year by the fall of 2012 with targeted expansion to 450,000 tons. The mine’s coal reserves are believed to be 27 million tons. Taken together, these three mines are expected to produce more than one million tons of low-sulfur, high BTU anthracite coal each year.
Bottom line here is that L&L Energy is successfully implementing its consolidation strategy in HeZhang County with Union Energy. This consolidation is upgrading the company’s overall mining portfolio by increasing reserves and production, driving profit and growth.
For more information about the company and its coal operations in China, please visit its website at www.llenergyinc.com
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