Master limited partnership Natural Resource Partners L.P. (NRP) said it has acquired nearly 160 million tons of aggregate reserves in Kentucky and Tennessee during the last month. The partnership paid a price of roughly $20.7 million for the purchases.
As apart of these transactions, Natural Resource Partners has acquired about 1008 acres of land and limestone reserves, which are located in two separate portions.
The first 508 acre portion is located on the Tennessee River near Paducah, Kentucky, leased to CALX Resources LLC. The property is to be the site for the development of a new crushed limestone operation that will serve not only local markets but also water-based sales along the Tennessee, Cumberland and Mississippi Rivers.
The second portion, comprising 500 acres located in Cleveland, Tennessee near Chattanooga. The acreage is located near a major highway, on rail and a navigable river. The property is leased to East Tennessee Materials LLC and is proposed for the development of a new crushed limestone operation that will service the Cleveland/Chattanooga, Tennessee market.
At the closings, Natural Resource Partners funded the transaction using roughly $14.7 million from its credit facility and expects to fund the additional $6.0 million by mid-2011.
Houston, Texas-based Natural Resource Partners L.P. is principally engaged in the business of owning and managing mineral reserve properties. The partnership mainly owns coal, aggregate and oil and gas reserves across the United States.
Natural Resource Partners currently has a short-term Zacks #3 Rank (Hold). The company is rated at par with its closest peers, Arch Coal Inc. (ACI) and Peabody Energy Corp. (BTU). Over the years, the partnership has demonstrated solid expansion through its inorganic growth strategy. We believe this strategy offers visible upside potential to unit holders over the long term. We maintain our long-term Outperform rating on the stock.
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